The Telegraph
Since 1st March, 1999
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Sabre Capital begins due diligence on Centurion

Mumbai, Dec. 7: Sabre Capital Worldwide today began a due diligence exercise on the troubled Centurion Bank to consider a possible infusion of additional capital in the private sector bank.

Centurion Bank chairman and managing director V. Janakiraman said the due diligence is likely to be completed by the month-end and Sabre would make its offer by the second week of January. He, however, did not divulge the exact stake Sabre would obtain in the bank.

Sabre Capital Worldwide has been established by a team of bankers, to invest in and help manage financial services businesses in emerging markets with Rana Talwar, former group chief executive of Standard Chartered Plc, as its managing partner. Centurion Bank was expected to find a strategic investor by March 2003.

Janakiraman, who was appointed by the Reserve Bank of India to clean up Centurion Bankís balance sheet, had stated in September that it needed Rs 120 crore as a Tier-I capital and Rs 30-40 crore as Tier-II capital to support normal asset growth which could be partly met through investment by the new investor.

The Tier-I capital stood at Rs 55 crore while Tier-II capital base was Rs 33.9 crore.

Executive director A. Asokan had said that the strategic investor should be able to manage banking business and may not be a bank by itself. The new investor would pick up 20th Century Finance Corpís 26 per cent stake held in the bank and may participate in rights issue to expand capital base.

Earlier this year, Jankiraman was optimistic that the bank would find a strategic partner by the end of the year. Though another option was a merger with a large nationalised bank (Andhra Bank), this could not be consummated.

The bankís senior management had earlier said that the three foreign partners, Keppel Bank, IFC, Washington, and Asian Development Bank, whose combined holding is 30 per cent, are likely to fulfil their obligation in the event of a rights issue.

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