It is a reserve that can not be distributed, nevertheless, can be utilized for the outlined functions.
The financial institution may even search the approval of the shareholders for issuing desire shares to the federal government for capital infusion within the subsequent EGM.
The extraordinary basic assembly (EGM) of the shareholders of UCO Bank will probably be held on Friday, May 7, 2021, by video conferencing and different audio-visual medium to transact the 2 companies, the financial institution stated in a regulatory submitting on Friday.
UCO Bank stated it’s going to search the consent of the shareholders to set off its accumulated lack of over Rs 12,537.39 crore as of March 31, 2020, by utilising the balance standing to the credit score of share premium account as on date and take the identical into consideration throughout the present monetary 12 months 2021-22.
“The effect of the proposed share premium reduction, if approved and finalised, would be that the accumulated losses, which as on March 31, 2020, stood at Rs 125,373,974,781.74, will accordingly be set off,” it added.
The lender stated in its view, it’s the most sensible and economically environment friendly possibility accessible to it within the current state of affairs to current a real and truthful view of the monetary place of the financial institution.
With the setting off, the financial institution stated, it will likely be ready to characterize its true monetary place which might profit shareholders as their holding will yield higher worth and likewise allow it to discover alternatives to the advantage of the shareholders, together with within the type of dividend cost.
“The proposal will also put the bank in a better position to achieve its turnaround plans in a time-bound manner,” it added.
For the fiscal ended March 31, 2020, UCO Bank had posted a web lack of Rs 2,436.83 crore.
The Kolkata-headquartered lender may even subject fairness shares to the federal government on a preferential foundation for Rs 2,600 crore capital infusion into the financial institution.
The financial institution stated it’s going to “create, offer, issue and allot 203,76,17,554 equity shares of the face value of Rs 10 each for cash at an issue price of Rs 12.76 per equity share, including premium of Rs 2.76…aggregating to Rs 2,600 crore on preferential basis to Government of India“.
Earlier on Wednesday, the board of the financial institution had permitted the difficulty of fairness shares on a preferential foundation to the federal government against the capital infusion of Rs 2,600 crore.
UCO Bank stated its present authorised capital is Rs 15,000 crore and the paid-up fairness capital is Rs 9,918.34 crore, with the federal government holding at 94.44 per cent equal of stake.
In order to strengthen the tier-I capital of the financial institution, the federal government has dedicated the capital infusion into the financial institution, it stated, including the capital raised can be utilised for the aim of shoring up of the widespread fairness and tier-I capital.
As of December 31, 2020, the financial institution’s risk-weighted property have been Rs 1,02,276.44 crore. Total capital was Rs 12,352.54 crore of which tier-I capital stood at Rs 9,211.30 crore and tier-II capital at Rs 3,141.24 crore.
The inventory of UCO Bank closed at Rs 11.94 apiece on BSE, up 5.48 per cent from its earlier shut.