The Hindu Business Line : Exim Bank's new credit lines may help fund takeovers

TWO new lines of credit from Exim Bank of India is expected to help Indian companies seeking investments in overseas ventures including project take-overs.

The bank is to put in place the credit lines - of $25 million each - one to be operated with the Syrian Government and the other with Tajikistan in the CIS over the next few months.

While the proposed line of credit for Syria will be initialled within the next one month, the one for Tajikistan will be activated over the next two months or so, the bank's Chairman and Managing Director, Mr T.C. Venkat Subramanian, told Business Line.

While these credit lines are essentially to facilitate financing Indian companies' overseas operations, including export of goods and services, these could also buttress their efforts in getting project financing, including acquisitions or seeking joint venture businesses in these countries. "To that extent, Exim Bank would leave the kind of operation for these funds rather open-ended," he said. Exim Bank, as part of its project financing for export manufacturing companies, is already involved in providing funds to some of the domestic companies for their proposals to takeover overseas ventures such as auto components, electrical equipment or specialty chemicals manufacturing. Several companies, especially those in pharmaceutical or auto-component making in India, are looking at takeovers of overseas companies seriously.

Mr Subramanian, who was here recently to participate in the CII's meet on textile industry, had also sounded the domestic textile industry on exploring the scope for acquiring overseas apparel brands. He said the time was opportune for Indian textile firms to think seriously of acquiring clothing brands which will enable them achieving entry level gains in global retailing. He is of the view that Indian industry's marketing efforts need to be strengthened to lure foreign direct investment.

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