The Hindu Business Line : ICICI Bank to sell 19% stake in ARCIL to US co Och-Ziff

ICICI Bank Ltd, the largest promoter of the Asset Reconstruction Company of India Ltd (ARCIL), plans to induct 19 per cent foreign equity into the latter.

The US-based Och-Ziff Asset Management Group has expressed interest in picking up 19 per cent stake in the company.

Official sources told Business Line that Och-Ziff would be buying out 1.9 crore equity shares with a face value of Rs 10 a share from ICICI Bank.

The total valuation of the deal would be done as per the existing FEMA guidelines, sources said.

Current position

Currently, Indian banks and financial institutions hold 100 per cent stake in ARCIL and there is no direct foreign equity participation.

The ICICI Bank currently holds 29.58 per cent stake in ARCIL. Following the sale of 19 per cent stake in the company, ICICI's stake would come down to 10.58 per cent.

ARCIL is currently offering its present shareholders a rights issue of equity shares having face value of Rs 10 at a premium of Rs 20 a share, taking the total to Rs 30.

However, since Och-Ziff would be buying the shares in the category of "investors share", post rights issue, the foreign investor's number of shares would remain the same though in percentage terms, the stake would come down substantially, sources said.

Och-Ziff has sought permission from the FIPB to buy the equity shares from ICICI Bank.

According to the application filed with the FIPB, before the rights issue the shareholding of ICICI Bank and Och-Ziff would be 10.58 per cent and 19 per cent respectively. Post rights issue, Och-Ziff's stake would come down to 8.64 per cent while ICICI Bank's stake would go up to 20.94 per cent, sources said.