IFCI to invite expression of interest for 26% stake

The IFCI Board on Saturday decided to invite expression of interest (EoI) for shortlisting a strategic investor. A large number of financial big-wigs like Barclays, Citigroup, Lehman Brothers, BNP Paribas, Deutsche Bank and other Indian banks are understood to be interested in picking up 26% equity in the company. The process of receiving EoIs would begin on August 13 and the last date for submitting EoIs would be September 14. The company expects the process of selection of a strategic investor to be over by January, a company official said. The lender has appointed Ernst & Young to look for the strategic investor. E&Y has been asked to suggest names of strategic investors and will help IFCI in carrying out modalities related with stake sale. As per the proposal, strategic investors will have to make bids within month of the calling of EOIs. Following this, IFCI will shortlist some investors. These investors will then be allowed to do a detailed due diligence and submit a fresh bid indicating the price they are willing to pay for the stake.Based on the second round of bids, the IFCI board will decide on the new stakeholder. As a precursor to stake sale, IFCI had in May passed an enabling resolution to increase foreign holding in the company up to 74% of its share capital. Request for proposals will be called by IFCI by October 1. IFCI’s accumulated losses stood at Rs 800 crore as on March 31, 2007 and it now has a positive net worth of Rs 446 crore.