Business Daily from THE HINDU group of publications
Thursday, May 22, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Thursday, May 22, 2008 ePaper | Mobile/PDA Version | Audio |
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Money & Banking
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Mergers & Acquisitions IFCI takes control of Foremost Factors Our Bureau New Delhi, May 21 IFCI Ltd has acquired 46.65 per cent shareholding of Mohan Exports Group in Foremost Factors Ltd (FFL) in a transaction valued at about Rs 11.6 crore. With this move, IFCI’s shareholding in FFL has increased to 96.49 per cent from a level of 49.84 per cent. Set up in 1996, FFL was the first private sector factoring company in India to offer both domestic and export factoring facilities. A factoring company buys account-receivables of its clients at a discount and takes the responsibility of collecting debts. In factoring, one can sell invoices at a discount for immediate cash. Factoring is not a business loan. “We have acquired the 46.65 per cent stake (about 93 .3 lakh shares) at book value which stood at about Rs 12.44 per share (as on March 31),” Mr Sujit K. Mandal, Executive Director, IFCI, told BusinessLine. Core operationsIFCI proposes to acquire the balance shareholding of 3.5 per cent in FFL from other shareholders so as make it a 100 per cent subsidiary. With IFCI acquiring majority ownership, indications are that the core business operations of the factoring company will get a boost. IFCI is also likely to use its network of regional offices and branches to extend factoring services to its clients in a big way. Currently, IFCI does not have a banking licence. FFL was originally promoted by Mr Mohan Puri, Promoter of Mohan Exports and Nations Bank Overseas Corporation USA and Nations Banc Commercial Corporation, along with the institutional investors viz., the 20th Century Finance Corporation Ltd and ICDS group. More Stories on : Mergers & Acquisitions | Financial Services
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