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C.R. Sukumar

Hyderabad , Dec. 8

DEVELOPMENT Bank of Singapore (DBS) is learnt to have been at an advanced stage of discussions with the Global Trust Bank (GTB) to pick up 49 per cent equity holding.

The Singapore-based bank is also said to have initiated the process of due diligence, according to market sources.

Having put on hold talks with the Newbridge Capital following differences of opinion on the proposed writing down of capital, GTB was said to have initiated talks with DBS as well as Commonwealth Bank of Australia sometime ago to sell a 49 per cent stake to them. It is also said to have held similar talks with Royal Bank of Scotland, as a part of the process to pick up the right strategic partner who could infuse capital as well as technology.

The GTB management and JM Morgan Stanley, its adviser on capital restructuring, were said to be currently holding meetings with the Singapore-based merchant-banking arm of Deutsche Bank on placing its equity shares with Development Bank of Singapore.

Declining to comment on the latest development with the Development Bank of Singapore, the GTB Managing Director, Mr Sudhakar Gande, said: "The bank has been pursuing various options for roping in strategic partner. We have been holding discussions with various investors and we are currently moving in the right direction. We expect to complete the transaction shortly."

Further, Mr Gande declined to comment, when asked whether the due diligence process was initiated by DBS.

GTB has been looking for a capital infusion of over Rs 500 crore, he told Business Line recently. The bank was seriously weighing the options of a combination of preferential placement and rights issue to restructure its capital.

DBS has one branch in Mumbai. It is primarily into the corporate and treasury businesses.

Since the regulations currently stipulate that a bank operating in India cannot pick up more than 30 per cent in another bank, the market sources say that DBS may decide in favour of merging its branch with GTB.

In such a case, the deal would follow Centurion Bank's capital restructuring model, where Bank Muscat was merging its operations in Bangalore with Centurion, sources said.

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