Corporation Bank to raise Rs 857 crore issuing preferential shares to govt

State lender Corporation Bank on Monday approved issuance of over 15.66 crore shares on preferential basis to government valued at about Rs 857 crore.

At the Extraordinary General Meeting (EGM) held in Mangaluru, the bank also approved to issue over 2.8 crore equity shares to LIC worth over Rs 142.99 crore.

In a filing on Bombay Stock Exchange (BSE), Corporation Bank said the meeting of the shareholders resolved and approved "to issue 15,66,15,497 equity shares...at an issue price of Rs 54.72 per share, to the government i.e. the promoter."

"...decision of government to infuse funds up to Rs 856,99,99,995.84 into the capital of the Bank, by way of issue and allotment of 15,66,15,497 equity shares of the bank...on preferential basis," said the filing.

Corporation Bank also said it will issue 2,81,60,693 equity shares of the bank at an issue price (which is at premium) of Rs 50.78 per share to the Life Insurance Corporation of India (LIC), a shareholder.

In August, government had announced capital infusion of Rs 20,088 crore in 13 public sector banks, including in SBI, PNB, IDBI, Bank of Baroda, Canara Bank.

Shares of Corporation Bank on Monday closed at Rs 44.15 apiece on BSE, down 0.11 per cent from previous close.