IFCI to consider proposal to invite bids for stake sale

IFCI to consider proposal to invite bids for stake sale
PTI
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First Published: Thu, Jul 05 2007. 11 01 PM IST
Updated: Thu, Jul 05 2007. 11 01 PM IST
New Delhi: The board of state-run lender Industrial Finance Corp. of India (IFCI) will on Friday consider a proposal to invite preliminary bids for selling at least a 26% stake to a strategic investor.
Along with annual results, the board would take up the issue of inviting expressions of interest from strategic investors, an IFCI official said.
The lender has appointed management consulting firm Ernst & Young (E&Y) to look for the strategic investor. E&Y has been asked to suggest names of strategic investors and will help IFCI in carrying out the modalities related with the stake sale.
According to the plan, strategic investors will have to make bids within a month of the memorandum of information being made public. Following this, IFCI will shortlist some investors. These investors will be allowed to do a detailed due diligence and submit a fresh bid indicating the price they are willing to pay for the 26% stake. The IFCI board will decide on the new stakeholder based on the second round of bids.
As a precursor to the stake sale, IFCI had in May passed an enabling resolution to raise foreign holding in the firm up to 74% of its share capital.
Foreign investors including Morgan Stanley (2.5%), Goldman Sachs (3.3%), Citigroup (2.5%) and Deutsche Securities (4.61%) already have equity interests in IFCI.
Altogether, 11 financial institutions, domestic as well as foreign, hold 34.8% in the company as on 31 March, which includes 8.4% stake and 5.01% stake held by LIC and IDBI, respectively.
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First Published: Thu, Jul 05 2007. 11 01 PM IST