Central Bank directs Cargills Bank to cut major shareholder’s voting stake

The Central Bank has issued a formal directive to Cargills Bank PLC, instructing the lender to reduce the voting rights of its major shareholder, the Cargills group, from 60.71 percent to 15 percent by end-2029, while raising capital through a phased, market-based approach to meet the minimum capital requirement of Rs.20 billion.

The directive, issued by the Governing Board of the Central Bank, also requires Cargills Bank to raise approximately Rs.2.5 billion via market mechanisms by end-2025, in a move aimed at reducing the Cargills group’s stake to 50 percent within that timeframe. 

The bank must subsequently continue the capital raising efforts to reach the full Rs.20 billion target, in line with the interim annual benchmarks set by the regulator.

“The bank is making arrangements to comply with the Direction of the Central Bank. Further disclosure will follow in due course,” Cargills Bank said in a filing yesterday.

The latest disclosure expands on an earlier announcement made on July 1, which confirmed the Central Bank’s decision to extend the deadline to meet the capital threshold from 2025 to 2029.