|2012-01-16 - 12:33:00 - DJ State Bank Of India Capital Infusion Plan Gets Finance Ministry OK - TV|
DJ State Bank Of India Capital Infusion Plan Gets Finance Ministry OK - TV
MUMBAI (Dow Jones)--India's finance ministry has approved a plan for the government to infuse capital through preferential shares in State Bank of India (500112.BY), television channels reported Monday, citing the lender's chairman.
The investment, likely INR60 billion-INR80 billion ($1.17 billion-$1.56 billion), will be done before the current fiscal year ends in March, the channels reported Pratip Chaudhuri as saying.
An infusion of INR60 billion by the government will take its stake in India's largest bank by assets to 64% from the current 59.4%.
The bank has previously said it is likely to need as much as INR400 billion in fresh capital over the next three years, including reinvested profits and funds from shareholders.
The fundraising plan comes as rising bad loans and a surge in provisions weigh on the bank's profitability, and raise concerns on whether the lender has sufficient capital.
Television channels also reported, citing Chaudhuri, that the account of loss-making Kingfisher Airlines Ltd. (532747.BY) remains a non-performing asset for the lender.
SBI has an exposure of about INR15 billion to the cash-strapped airline, which has total outstanding debt of INR61.49 billion.
Kingfisher's lenders are due to meet Tuesday and look at a capital infusion plan by the airline's founders.
A group of lenders to debt-ridden Air India Ltd. will also meet Tuesday to discuss the state-run airline's debt-recast plan.
-By Sourav Mishra; Dow Jones Newswires; 91-22-61456112 firstname.lastname@example.org
(END) Dow Jones Newswires
January 16, 2012 07:33 ET (12:33 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.