The Hindu Business Line : LVB plans rights issue, bonds to hike capital

IN its bid to augment capital funds to comply with Basel II norms, the Karur-based Lakshmi Vilas Bank Ltd has resolved to enhance both tier I and tier II capital by March 2006.

According to the Chairman, Mr A. Krishnamoorthy, the board has resolved to offer equity shares on a rights basis at 7:10 ratio and issue unsecured, subordinated bonds for a total value of Rs 30 crore.

The equity issue is to be priced at Rs 55 per share, at a premium of Rs 45. The bank would garner Rs 44.31 crore as addition to tier I capital through this rights issue.

The 8.25 per cent unsecured bonds would have a maturity period of 67 months.

Thecapital adequacy ratio as on September 2004 stood at 12.4 per cent. Mr Krishnamoorthy said the capital infusion plans, when put in place, would ensure a minimum CAR of 12 per cent.

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