IFCI to sell stakes in 100 unlisted firms
A day after cancelling the stake sale process, IFCI, the country’s oldest financial institution, today invited bids from merchant bankers to value and buy its shares in unlisted firms to enable the company to sell them.
“We have identified 100 companies, wherein IFCI would like to sell off its stake,” an IFCI official said. Merchant bankers and other interested parties were requested to submit bids before January 10, 2008, in this regard, he added.
Term lender IFCI had over time acquired stake in many companies either directly or in lieu of debt, he said. When asked about the capital that the company planned to raise, he said, it all depended on valuation and bids.
According to an advertisement by IFCI, offer for purchase of share, if any, may be submitted to the company on or before January 10.
IFCI CEO and Managing Director Atul Rai had said yesterday, “We need the capital.” Talking about the challenges before the organisation, he said that included capital adequacy and building up expertise.
During the year, the financial institution sold its stake in the National Stock Exchange and rating agency Icra. Conditional offers, including the management control, could not be negotiated between IFCI and the bidder after three-day-long discussion, leading to the cancelling of the process.
The process started with the appointment of Ernst & Young as consultant to identify a strategic partner in March-end. The last stage was reached on December 14, when three suitors finally submitted the financial and technical bids.
Besides the Sterlite Industries and Morgan Stanley combine, two other consortia that submitted bids were Shinsei Bank, Punjab National Bank and JC Flowers and Co and Cargill Financial and Texas Pacific Group.
However, NRI billionaire Anil Aggarwal-led Sterlite Industries, jointly with global investment banking giant Morgan Stanley, emerged as the front-runner by quoting the highest price. Rai had said there was no possibility of starting the process again in the “same format”.
“The run-up in share prices is also the reason for falling through of the deal,” he said.
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THE NEXT MOVE
Merchant bankers and other interested parties are requested to submit bids before January 10, 2008
The term lender had over time acquired stake in many companies either directly or in lieu of debt
During the year, the financial institution sold its stake in the National Stock Exchange and rating agency Icra
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