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December 26, 2007 |
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IFCI LTD: Invites Bids to Value & Buy Stake in Unlisted Firms IFCI Ltd has invited bids from merchant bankers to value and buy its shares in unlisted firms to enable the company to sell them, various reports say. The move came after the finance firm called off its plan to sell 26% of the company to what would have been a strategic partner. As previously reported by the Troubled Company Reporter-Asia Pacific, IFCI cancelled the stake sale after its board of directors rejected the financial proposal submitted by the consortium of Sterlite Industries and Morgan Stanley and Co, saying that the conditional offer is unacceptable. The Economic Times, citing unnamed sources close to the development, said that the Sterlite consortium offered a INR107- per-share minimum price at which institutional shareholders will convert their debt into equity. Management control was the reason behind deal being called off, moneycontrol.com quoted CNBC-TV18 in a report. Thomson Financial News, citing the Times, reported that the Sterlite-led consortium was seeking a guarantee from IFCI to ensure that any further dilution in IFCI stake be undertaken with their consent, which was unacceptable to IFCI. Last week, right after the sale was called off, the press quoted an unnamed IFCI official as saying that the finance institution has identified 100 companies where it would like to sell off its stake. Merchant bankers and other interested parties reportedly have until January 10, 2008, to submit their bids. IFCI had over time acquired stake in many companies either directly or in lieu of debt, the Press Trust of India cited its source as saying. IFCI Limited -- http://www.ifciltd.com/ -- is established to cater the long-term finance needs of the industrial sector. The principal activities of IFCI include project finance, financial services, non-project specific assistance and corporate advisory services. Project finance involves providing credit and other facilities to green-field industrial projects (including infrastructure projects), as well as to brown-field projects. Financial services covers a range of activities wherein assistance is provided to existing concerns through various schemes for the acquisition of assets, as part of their expansion, diversification and modernization programs. Non-project specific assistance is provided in the form of corporate/short-term loans, working capital, bills discounting, etc to meet expenditure, which is not specifically related to any particular project. Its investment portfolio includes equity shares, preference shares, security receipts and government securities. * * * As reported in the Troubled Company Reporter-Asia Pacific on April 3, 2007, India's Credit Analysis & Research Ltd. retained a CARE D rating to IFCI's Long & Medium Term Debt aggregating INR91.36 crore. The amount represents the outstanding non- restructured amount under the Bonds series, which have been rated by CARE. Fitch Ratings, on June 29, 2006, affirmed IFCI's support rating at '4'. The outlook on the rating is stable. |
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