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Andhra Bank will raise Rs 618 crore by way of allotting preferential shares to the Government of India.
The board of directors of the Hyderabad-based bank at its meeting held on Friday approved the preferential allotment of equity to the Government to the tune of Rs 618 Crore (including premium) subject to shareholders' approval, the bank informed the Bombay Stock Exchange.
The bank had received a letter from the Government on its decision to infuse capital into the bank.
The extraordinary general meeting of shareholders would be convened for the purpose on March 23.
“Accordingly, the bank proposes to take necessary steps to raise capital by creating, offering, issuing and allotting such number of equity shares of face value of Rs 10 each for cash at such price as may be determined by the Board and the Government of India,” Andhra Bank said.
The process would be completed by March 31 it added.
The Andhra Bank scrip declined 1.06 per cent on the BSE on Friday to end at Rs 149.05.
The bank, which posted a net profit of Rs 331 crore (20 per cent increase over year-ago period) during the third quarter ended December 31, 2010, recorded a Capital to Risk Weighted Assets Ratio of 12 per cent.
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