The bank is offering 10.67 crore equity shares in rights issue at a premium of Rs 2. The issue would help the bank to augment more funds in the Tier I capital and would better its capital adequacy ratio from the Reserve Bank of India's prescribed minimum level of 9 per cent.
The bank has already convened a shareholders meeting to seek their nod regarding the rights issue and the Esop. The appointment of M J Subbaiah as additional director and subsequently as the managing director would also cleared by the shareholders in that meeting.
According to the notice issued to shareholders, the bank is also changing its articles of association to allow 5 per cent acquisition of stake by either an individual or a company. However, this sort of move needs a formal clearance from the apex bank too.
Regarding the rights issue, the notice stated that the record date of the issue would be finalised after formal discussions with the stock exchanges and depositories.
The notice to the shareholders stated that officers and above up to the grade of the managing director of the bank would be eligible for the stock option scheme. "The object of the Esop is to attract, encourage and retain the talent to enable such employees to participate in the long term growth of the bank," the notice said.
The pre-rights equity base of Centurion Bank is 15.24 and post rights would be around 25.91. With one crore of equity shares slotted for Esop, employees would be holding around four per cent equity stake in the bank after the rights issue.
