Lakshmi Vilas Bank shareholders approve fund rasing plan

August 14th, 2008 - 10:22 pm ICT by IANS  

Chennai, Aug 14 (IANS) The shareholders of the Lakshmi Vilas Bank Ltd (LVB) Thursday approved a bank proposal to raise Rs.2.5 billion ($59.5 million) through qualified institutional placement (QIP). In the annual general meeting (AGM) held at Karur, Tamil Nadu, the bank management and the shareholders decided to raise QIP at a base price not less than 2.5 to three times of the book value.

The book value is around Rs.95 and the market price is also the same.

The issue price per share as per the modified resolution passed in the AGM will be over Rs.235, much higher than what the bank had earlier planned.

LVB managing director V.S. Reddy told IANS that the bank earlier thought of a price band of Rs.150-Rs.180.

“The modification of the resolution will not be a setback to the bank. We have time to raise the money as the resolution is valid for one year,” Reddy said.

“The bank can look for a mix of preferential, rights and QIP issue. The bank can still raise the money as the investor will look at the long-term value and not the short-term market fluctuations,” K.R. Pradeep, who holds over one percent stake in the bank, told IANS.

The shareholders also increased the board strength to 12 by electing two new directors D.L.N. Rao, a lawyer and D.K. Manjunath, a chartered accountant.

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