The Hindu Business Line : Gelli back on GTB board `to reassure investors'

GLOBAL Trust Bank (GTB), the Hyderabad-based ailing private sector bank, has reinducted its founder-promoter, Mr Ramesh Gelli, on to the board after a gap of close to three years.

The GTB board in Mumbai meeting on Monday also decided to appoint Dr Pamidi Kotaiah as the Non-Executive Chairman of the bank.

"The GTB board is now considering the need for enhanced funds to the tune of around Rs 800 crore keeping in view the growth prospects," Mr Gelli told Business Line.

On his comeback, Mr Gelli said, "the GTB board felt it desirable to have the core promoters back on the board to boost confidence among the shareholders, especially when the board was considering rights issue as one of the key options for raising additional funds. The promoters are ready to show their commitment to the bank by pumping in funds through rights issue."

As per the latest distribution schedule for the period ended December 31, 2003, the promoters group was holding 20.18 per cent stake in the GTB's paid-up equity of Rs 121.35 crore. While the institutional investors together were holding 5.03 per cent stake, Goldman Sachs Investments (Mauritius)-I Ltd holds 4.24 per cent.

Among others, private corporate bodies hold 22.1 per cent, NRIs and OCBs together hold 8.99 per cent and Indian public holds 40.25 per cent.

Despite resorting to profit bookings several times in the market booms, the International Finance Corporation, Washington, which has been with the bank from its inception, currently holds 2.6 per cent stake in GTB.

As on March 31, 2003, the ratio of net NPAs to net advances stood at 19.77 per cent, while the total provisions coverage ratio amounted to 33.23 per cent.

On adjusting the carry forward loss of Rs 265.08 crore for the year, the networth got eroded to Rs 2.44 crore.

The capital adequacy ratio as at the end of last fiscal amounted to zero owing to the higher provisioning and loss incurred by the bank.

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Gelli back on GTB board `to reassure investors'