The Hindu Business Line : Reconstruction co to have foreign partners

Overseas equity
Barclays Capital and Ankar Capital LLC would be acquiring 9.63 pc and 9.17 pc stake.
ICICI Bank to divest 19 pc stake in favour of Och-Ziff Asset Management Group.
Taken together, ARCIL would be having 37.80 pc foreign equity.

New Delhi , Jan. 13

The Asset Reconstruction Company of India Ltd (ARCIL), promoted by State Bank of India, ICICI Bank, IDBI Bank and Punjab National Bank, plans to have three foreign partners.

The company is now offering 12 crore equity shares to its existing shareholders on rights basis for Rs 10 each at a premium of Rs 20 per share. Till date, the company does not have any foreign shareholding.

Barclays Capital, through its Hong Kong-based subsidiary Barclays Capital Securities Asia Ltd, and the US-based Ankar Capital LLC, through its Indian subsidiary Ankar India Special Situations Ltd, would be acquiring 9.63 per cent and 9.17 per cent stake in ARCIL.

Earlier, ICICI Bank Ltd, the largest promoter of ARCIL, had received Government approval to divest 19 per cent stake in the company in favour of the US-based Och-Ziff Asset Management Group post-rights issue.

Taken together, ARCIL would have 37.80 per cent foreign equity.

According to the plans, Barclays would acquire 9.63 per cent of the pre-rights issue paid-up capital of ARCIL, which has a paid-up capital of Rs 100 crore. However, if Barclays acquires the shares post-closure of the rights issue and if it is fully subscribed then Barclays would acquire 2,11,86,000 equity shares that would account for the same 9.63 per cent stake in ARCIL. Post-rights issue, ARCIL's paid-up equity would go up to Rs 220 crore.

Simultaneously, Ankar India would acquire 9.17 per cent stake in ARCIL forming part of the unsubscribed portion of the rights issue or acquire the shares from the existing shareholders in which case Ankar may acquire up to 20 per cent.

The Government sources said that while the exact amount of foreign direct investment to be brought in by Barclays would depend on the number of shares it would acquire, Ankar would be investing a sum of Rs 60.51 crore for 9.17 per cent stake.

According to the existing FDI guidelines, asset reconstruction companies are allowed to have up to 49 per cent FDI in their equity capital. The proposals of Barclays, Och-Ziff and Ankar, however, would have to be cleared by the Reserve Bank of India before the actual transactions take place.

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Reconstruction co to have foreign partners