The Hindu Business Line : Nadars may offload 10 pc stake in Tamilnad Mercantile

Mr S. Radhakrishnan (centre), Chairman, Tamilnad Mercantile Bank, flanked by the directors, Mr B. Ramachandra Adityan and Mr N. Balasubramanian, at a press conference in Chennai. — Bijoy Ghosh

Chennai , April 17

THE Nadar community proposes to offload 10 per cent of the equity held by its members in Tamilnad Mercantile Bank to domestic or overseas investors, in order to raise money to pay Mr C. Sivasankaran of the Sterling group.

Last April, the members of the community struck a deal with Mr Sivasankaran who then held 33 per cent of the bank's equity. Under the agreement, Mr Sivasankaran was to transfer the 33 per cent stake to seven named members of the community, for a consideration of Rs 130 crore. The shares were to be pledged back to Mr Sivasankaran until the money was paid.

Another 34 per cent of the bank stake had previously been transferred to some 25,000 members of the community.

Mr B. Ramachandra Adityan, Director, TMB, had told journalists that to raise a part of the Rs 130 crore, the community proposed to sell 10 per cent stake from among the shareholders.

He said that the RBI had not approved the transfer of the shares representing the 33 per cent to the said seven members. Therefore, the Nadar community planned to get another 15-odd members of its community to buy a part of the stake.

Meanwhile, officials of Tamilnad Mercantile Bank said that the bank's business had crossed Rs 7,650 crore as of March 31, 2005. Networth rose beyond Rs 500 crore, taking the capital adequacy ratio above 18 per cent. Credit increased by 24 per cent.

The bank's Chairman, Mr S. Radhakrishnan, said that the bank had an investment portfolio of Rs 2,200 crore, consisting mostly of high yielding securities, giving an average yield of over 11 per cent. The bank had neither sold nor shifted securities to `held to maturity' category, because its holdings had not suffered much depreciation, he said.

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