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Our Bureau

Hyderabad , Feb. 24

GENUINE entrepreneurs caught up in financial mess owing to factors well beyond their control and desperately looking for a helping hand to turn around their enterprises can soon expect to get a major fillip if the `Turnaround Fund' being planned by Mr Ramesh Gelli and associates materialises.

The former captain of Vysya Bank and chief promoter of Global Trust Bank (GTB) is currently in talks with some like-minded high net worth individuals, institutions and mutual funds to float an exclusive fund, claimed to be the first of its kind. It would be a combination of venture capital and term loan, for helping genuine entrepreneurs revive their projects that are either unable to grow as planned or are under financial crisis.

"However, the idea is to confine the scope of this turnaround fund to few promising industries, say a maximum of five to six. These include industries such as pharmaceuticals, information technology and engineering. We plan to appoint experts to head each of the segments of the fund for effective fund management," Mr Ramesh Gelli told a group of newspersons here on Tuesday.

The problems of genuine entrepreneurs were on the rise with the development financial institutions now in the process of converting themselves into banking institutions. At present, almost none of the banks are interested in long-term funding. The moment the enterprises are in trouble, the banks want to move out even by losing a portion of their outstandings by entering into one-time settlements (OTS) with the promoters.

"There are many entrepreneurs who are not in a position to raise the requisite funds for entering into OTS with the financial institutions and banks. We have observed that there are a good number of genuine entrepreneurs, who are keenly interested in reviving their units and growth. The problem is that we do not have the presence of `turnaround funds' in our country to help such promoters and their enterprises," Mr Gelli said.

He said, "The response has so far been quite encouraging. To begin with, we plan to come out with Rs 100-crore turnaround fund, focussing exclusively on few industrial segments. However, we expect that it may take at least six months time to float such sizable fund and kick off operations. If everything goes well, the fund should take off by September this year."

Admitting that the returns from turnaround fund would not be as attractive as those from venture capital funds, Mr Gelli, however, said the returns would definitely be encouraging than long-term funding. He said his family would commit to a sizable portion of the proposed turnaround fund.

Bullish on the revival of GTB with the help of strategic partners, he said the core promoters were prepared to pump in funds required for strengthening the bank by way of subscribing to the rights offer currently being contemplated.

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