StanChart examines if IDR holders can buy into $5.1 bn rights issue

Mumbai: British major Standard Chartered Tuesday said it is examining the legal aspect as to whether Indian Depository Receipt holders of the lender can participate in the USD 5.1 billion rights issue programme.

"The company is currently clarifying local legal and regulatory requirements in order to determine whether to extend the rights issue to holders of Indian Depository Receipts (IDRs) and will make a further announcement, as appropriate," Standard Chartered said in a statement.

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The bank had issued IDR in 2010.

The announcement, however, does not constitute an offer or invitation for any investment or subscription for IDRs in India, it added.

"The announcement has not been and will not be submitted to the Registrar of Companies in India or the Securities and Exchange Board of India for prior review or approval," it said.

As per the statement, the group continues to critically assess the quality of the loan book and has taken a loan impairment charge of USD 1.2 billion in the third quarter, broadly in line with the second quarter, which reflects continued adverse trends in particular in India and commodities, offset by further improvement in retail clients.

The group's cover ratio has improved to 58 percent of gross non-performing loans, from 54 percent at the end of June, and including collateral, increased to 72 percent from 70 percent, it said.

The bank announced a plan to raise USD 5.1 billion in capital through a rights issue, and a strategic review that raised its cost-cutting target to USD 2.9 billion between 2015 and 2018.

It added, it was refocusing on "affluent retail clients" rather than corporate and institutional banking businesses and would exit or restructure USD 100 billion of assets.