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IFCI in Talks with Institutions for Stake Sale
December 3, 2007 / 5:44 AM / 10 years ago

IFCI in Talks with Institutions for Stake Sale

MUMBAI (Reuters) - Lender IFCI Ltd (IFCI.BO) said on Monday it is in talks with multilateral institutions to offer a stake in it.

However, the firm did not mention the name of the institutions or the stake it wants to offer.

The Economic Times newspaper reported the board of IFCI has decided to bring in International Finance Corp, an arm of World Bank, and would hold less than 20 percent.

Board of IFCI has also approved issues relating to the conversion of zero coupon optionally convertible debentures by banks and financial institutions worth 14.79 billion rupees.

Financial institutions Life Insurance Corp of India, General Insurance Corp and associates agreed to convert part of the debentures into equity, which would retain their holding in IFCI in percentage terms at existing levels, IFCI said in a statement.

The balance amount held by the institutions would carry an interest rate of 75-basis points below 15-year government securities (G-sec) for the first three years and 75-basis points above 15-year G-Sec, three years post induction of strategic investors.

State-run banks have agreed to convert their entire holdings in these debentures into equity, it said in a statement.

It said four bidders out of eight have carried out due diligence for picking up a stake in the firm as strategic investors.

The last date for submission of financial bids is December 14.

Reporting by Virendra Verma; Editing by Prem Udayabhanu

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