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Sabre
conducts Centurion Bank’s due diligence for equity
infusion
Our
Banking Bureau
9 December 2002
Mumbai:
Sabre
Capital Worldwide Inc, a private equity fund promoted
by former Standard Chartered chief Rana Talwar, is conducting
an exclusive due diligence of Centurion Bank for a possible
capital infusion, a Centurion Bank statement issued here
said.
Centurion
Bank chairman and managing director R Janakiraman said
the fund began due diligence on 7 December 2002. Sabre
is expected to complete the exercise by the end of the
month and make its offer by the second week of January
2003.
Sabre
Capital is a private equity fund established by a team
of bankers to invest in and help manage financial services
businesses in emerging markets, the statement added.
Sabre
is the newest of a string of investors that has done due
diligence of the capital-starved new generation private
bank. Previously several banks (including HDFC Bank and
Citibank) and private funds had done due diligence, but
pulled out.
Currently
the foreign partners of the bank (Asian Development Bank,
Keppel and International Finance Corporation [IFC]) together
hold about 36-per cent equity. According to sources, Sabre
may buy a 5-per cent stake from IFC, which is willing
to sell a part of its holding.
 Centurion
Bank’s market valuation is currently only a little
below Rs 100 crore. Janakiraman had recently said the
bank needs tier-I capital in the region of about Rs 120-150
crore.
Centurion
has been in trouble for some time now with its capital
adequacy ratio (CAR) dipping way below the regulatory
norm of 9 per cent. It posted a net loss of Rs 161.8 crore
for the year ended 31 March 2002. It also incurred a net
loss of Rs 3.6 crore for the first quarter ended 30 June
2002, even though it made an operating profit of Rs 7.8
crore.
 On
31 March 2002 it had negative reserves of Rs 97 crore
and an equity capital of Rs 152 crore. The CAR as on that
date stood at 4.16 per cent, which further declined to
4.05 per cent on 30 June 2002. The bank has, however,
cleaned up its balance sheet with a provisioning of Rs
176 crore for the past year.
List of reports on Centurion
Bank
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of reports on Sabre Capital Worldwide Inc
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