LIC to buy addtnl stake in Central Bank of India for Rs 540cr

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State-owned Central Bank of India proposes to raise an estimated Rs 540 crore by selling stake on preferential basis to Life Insurance Corporation (LIC).

The board approved raising of additional capital by issuance and allotment of, up to 7,10,75,753 equity shares of the face value of Rs 10 each to Life Insurance Corporation of India on preferential basis, Central Bank of India said in a BSE filing.

Shares of the bank today closed at Rs 76.45 apiece. At this rate, the stake proposed to be bought by LIC would be worth Rs 543 crore.

LIC currently holds 7,34,20,914 shares, or 5.44 per cent stake, in Central Bank of India.

The price for preferential allotment may be determined as per SEBI Regulations, it said, adding, an Extra-Ordinary General Meeting of shareholders will be held on July 15, 2014 to pass this resolution.

The Government of India (GoI) currently holds 88.63 per cent stake in Central Bank of India.

The bank recorded a 4 per cent decline in net profit to Rs 162.44 crore in the fourth quarter ended March 31.

It had posted a profit of Rs 169.15 crore in the January-March quarter of 2012-13.

Total income increased to Rs 6,961.67 crore from Rs 6,403.57 crore.

For 2013-14, the bank made a loss of Rs 1,262.84 crore, compared with a profit of Rs 1,014.96 crore in the previous financial year, due to higher provisioning.

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