Due to a lack of documentation and "compliance with certain formalities required," Brazil's central bank May 15 rejected Banco Mercantil do Brasil SA's capital increase, according to a regulatory filing from the Belo Horizonte-based bank.
Banco Mercantil said it is still evaluating if it would appeal the ruling of the Banco Central do Brasil, which the lender would have to do within 10 days of receipt of the order.
The capital hike, originally approved by the company in August 2017, was made to increase the company's share capital by 60.0 million Brazilian reais with the issuance of 6.3 million ordinary shares. In October 2017, shareholders had subscribed to a total of 6,314,938 shares.
A separate capital hike by Banco Mercantil, involving the issuance of 3,000,000 common shares, was approved by the central bank earlier in May.
As of May 17, US$1 was equivalent to 3.69 Brazilian reais.