It is known that LIC of India has already claimed a 51% stake in IDBI Bank. LIC has now said that it is interested to take a controlling 51% per cent in the bank. This has been discussed with the management as per details available.
- This means, the rights to be given would include nominees on the board of the ailing bank, and influence strategy.
- Also, LIC wishes to take stake via preferential allotment of shares or open offer. The valuation however would depend on the method which is selected for the purpose.
- At present Government owns 85.96 per cent of IDBI whereas LIC has 7.98 per cent stake at the end of June this year.
- It is further learnt through Government resources that it would take around five to six months for IDBI to obtain all regulatory approvals after which the Preferential shares could be issued.
- It is necessary that
- the bank amends its Articles of Association
- Union Cabinet approves reduction of Government’s stake below 51 per cent which would take about a month.
- IDBI should take clearance from its other shareholders, RBI and SEBI. Bank would be required to issue a postal ballot notice and hold a separate General Body meeting of the stake holders.
- Already the bank has obtained approval of the shareholders to raise Rs. 50 billion by way of issuing new shares through various routes including Qualified Institutional Placement.
- August 13, 2018 is the date slated for IDBI’s Annual General Body meeting.
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