Dhanalakshmi sets up recast panel committee

The top management at Thrissur-based Dhanalakshmi Bank is working overnight to chalk out a recast plan. A committee to explore various options to boost the bank's net worth to Rs 300 crore from the existing Rs 125 crore has been formed.

Sources indicate that the bank was looking at raising around Rs 150 crore through a combination of rights issue and allotment to qualified institutional buyers.

The bank is in talks with AIG Private Equity, said a source. P Raja Mohan Rao, a businessman from Andhra Pradesh, is the largest shareholder in Dhanalakshmi Bank with 36.39 per cent stake. 
 

LOOKING FORWARD
Rs crore	Net worth	Advances	Deposits
2001-02	78.15	880.10	1494.34
2002-03	84.90	917.71	1657.24
2003-04	120.38	1080.49	1837.89
2004-05	134.07	1138.59	2155.77
2005-06	114.12	1410.15	2338.84
2006-07	134.40	1594.34	2532.67

Bank Managing Director and Chief Executive Officer P S Prasad said, "The committee is yet to finalise the route through which the bank will raise capital. We could also look at a follow-on public offer. A decision will be taken shortly." Asked about a possible private placement with AIG Private Equity, Prasad said, "Nothing is in the offing."

"To facilitate the restructuring process, the bank recently appointed Suresh Balasubramanium as an independent director," the source said.

Balasubramanium manages Quartet Financial Services, a boutique investment bank based in Mumbai advising clients on mergers, acquisitions, restructuring and capital raising'.

Prior to this, he was the managing director and chief executive officer at AIA Capital India Private which acts as an advisory arm to AIG Private Equity.

The bank's net profit as on December 31, 2006, was Rs 3.11 crore against Rs 1.04 crore. Its capital adequacy ratio stood at 9.63 per cent.

Dhanalakshmi, Ratnakar Bank and Catholic Syrian bank are among those banks racing against the Reserve Bank of India (RBI) deadlines to raise their net worth to the minimum required Rs 300 crore and pare promoter holding to 10 per cent.