GTB looking for foreign investor

By SiliconIndia   |   Wednesday, 24 September 2003, 07:00 Hrs
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HYDERABAD: The Hyderabad-based Global Trust Bank said on Tuesday that the bank’s board had approved a capital raising programme for the bank, with a further increase of unauthorized capital.

The board has approved the proposal to offer further shares through a foreign direct investment up to 49 per cent to foreign investors under the automatic route as permitted for a private sector bank.

¬ďWith the decision taken by the board to revitalize the bank, I am certain we will be able to strengthen the financial position of the bank and meet the capital adequacy requirements stipulated by RBI. This will help us steer the bank back to profitability. We hope that with the new committee in place the entire process of identifying the right foreign partner will speed up,¬Ē a bank official said.

GTB had hired Lazard India, a merchant banker, as its financial advisor to raise additional capital for the trouble bank in January this year.

GTB, founded by Ramesh Gelli in 1994, had a paid-up equity capital of Rs 121.36 crore as on September 30, 2002. The bank was hit in the bear hammering of April 2001. It had substantial exposure to entities floated by tainted stockbroker Katan Parekh. Following the stock market debacle, the bank has been setting aside largest sums of money towards ¬ďcontingencies¬Ē, including the provision of 182.67 crore in 2001-02.

The bank’s board will be meeting on September 30 to consider the financial results for the year 2002-03.

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