Business   

Chola DBS Finance goes in for capital restructure

CHENNAI: Chola DBS Finance, a leading non-deposit taking and non-banking finance company (NBFC), has gone in for a major overhaul of its capital.

The revamp plan, approved by its board here on Friday, envisages the creation of a special one-time standard asset provision of Rs. 200 crore. It also provides for loan losses / write-offs to the extent of Rs. 100 crore. Besides these, it provides for the adjustment of impairment loss in investment of Rs. 23.53 crore in one of its subsidiary companies – DBS Cholamandalam Distribution Ltd.

To ensure that these provisions do not cause any serious disturbance to the current earnings of the company, the board-approved proposal has suggested that the aforesaid adjustments aggregating Rs. 323.53 crore be set off by dipping into the share premium account. The capital re-organisation plan now requires the approval of the shareholders, consent of the creditors and confirmation of the Madras High Court. A. Vellayan, Vice-Chairman of the Murugappa Group, and Pranam Wahi, Managing Director and Head (Global Transaction Services) of DBS Group of Singapore, said the proposal was a proactive measure and in the best interest of the company. Mr. Vellayan said the board had also decided to pull out of the personal loan space. N. Srinivasan, Finance Director of the Murugappa Group, said Chola DBS would focus on vehicle finance, home equity and corporate mortgage segments.

Mr. Srinivasan said the company had raised Rs. 135 crore in September last by way of conversion of warrants into equity shares. Last October, the board had also approved a proposal to raise further capital aggregating Rs. 500 crore. Both the joint venture partners (the Murugappa Group and DBS) would bring in a total of Rs. 300 crore. Each would contribute Rs. 150 crore in the form of fully convertible cumulative preference shares. This would happen before the end of March, Mr. Srinivasan said.

The company posted a loss of Rs. 26.15 crore before exceptional items and a total loss of Rs. 48.32 crore for the nine-month period. The total loss in the third quarter, after exceptional items, stood at Rs. 35.81 crore.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

GDP growth pegged at 9 per cent in 2007-08
Tata Motors Q3 loss at Rs. 263 crore
Chola DBS Finance goes in for capital restructure
Apollo Hospitals posts 30 p.c. rise in Q3 revenue
Tata Tea net at Rs. 396 cr.
IOB net up 26 %
PNB to cut lending rates
U.S. delays removal of bond requirement on seafood imports
Dhanalakshmi Bank’s net profit up by 85 per cent
Shares allotted
Popular brands survey
SBI Life to expand business in State
L&T profit rises
Metal stocks lead rally
Exchange Rates
Bullion Rates
GMR Infrastructure net dips
Dabur announces 75 per cent interim dividend
Siemens net profit up 68 per cent
Calsoft becomes Intel Forum member
Reliance Mutual Fund bags award
Sanmar Group wins SAIL BMQB Trophy

Copyright © 2009, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu