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Our Bureau

New Delhi, Aug. 4 IFCI Ltd expects to complete the process of induction of a strategic investor with a 26 per cent stake in the company by end-January next year, its Chief Executive Officer and Managing Director, Mr Atul Kumar Rai, has said.

The company’s board on Saturday gave its nod to invite expression of interest (EOI) for being inducted as a strategic investor. EOIs will be invited from August 13 and the last date for submission of bids would be September 14.

“The plan is to issue fresh equity to the extent of 26 per cent to the successful bidder. We need a strategic investor who will help us remain relevant and viable. We have reached a stage in our corporate history where we want to reposition ourselves. As we transform, we also want to retain our basic character (as a development finance institution),” Mr Rai told Business Line after today’s meeting.

Mr Rai also said that IFCI would not be averse to allowing a consortium of investors to take a 26 per cent stake as long as there is a “degree of fit” with the institution.

The board also considered and approved the draft document of Ernst & Young, which had been given the mandate to advise the company on induction of a strategic investor. Outlining the process of induction of a strategic investor, Mr Rai said that EOI bidders would be shortlisted by September 25 and that the request for proposals (RFP) would be issued by October 1.

For the quarter ended June 30, 2007, IFCI reported a net profit of Rs 246.86 crore on a total income of Rs 485.57 crore.

The company recorded a net loss of Rs 15.61 crore on a total income of Rs 257.61 crore in the same period last year. As on June 30, 2007, banks/financial institutions held 10.40 per cent, mutual funds/UTI 2.93 per cent, foreign institutional investors 14 per cent and foreign venture capital funds 18.59 per cent in IFCI. Individuals cumulatively held a little over 34 per cent stake in the company.

More Stories on : Mergers & Acquisitions | Financial Institutions

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