CSB in final stage to raise Rs500-Rs1000 cr capital

Kochi: It’s close to nine months since the ‘almost-through’ deal between Catholic Syrian Bank (CSB) and Prem Watsa’s Fairfax Holdings Ltd fell through, leaving the bank scouting for new investors.

But now, TS Anantharaman, the chairman of the bank, says that the bank is in the final stages of raising the much-needed capital. Talking to businessbenchmark.news in Kochi the other day, the chairman said there was enough appetite in the market and he was confident of raising anything between Rs500 crore and Rs1,000 crore.

“There are several phases to be completed before a deal could be struck and I can confidently tell you that we are in the final stages and we will be able close the deal within two or three months,” Anantharaman added.

To a query on the likely number of investors in the deal, he said, “Don’t ask me the details. But things are in the final stages.”   On the IPO, which has been hanging fire for a couple of years now, he said the bank will take a call only after the first phase of capital infusion is through. “But we don’t rule out the IPO possibilities.”

For Catholic  Syrian Bank (CSB), fresh capital infusion is a requirement at this juncture for the bank to grow as its capital adequacy ratio is not so comfortable  – at 11.09 as on September 30, 2017 (third quarter results are yet to be announced as on February 11 as we prepare this article).

Moreover, the asset base has hardly grown in the past nine months as they stay at Rs16,357 crore against Rs16,223 crore as on March end, 2016. Worse, the bank posted a loss of Rs13.13 crore for the third quarter against a (net) profit of Rs53.17 crore for the same period last year.

With a modest paid up share capital of Rs81.01 crore, the bank sits on a (total) equity of Rs827.37 crore (as on September end, 2017).

The tripped capital raising plan had Fairfax to have picked up 51 per cent stake in CSB, but with a much smaller voting rights. Both Fairfax and CSB failed to reach a consensus on the pricing of the share value.

 

 

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