NEW DELHI: IFCI will soon invite expressions of interest (EoI) to sell its 26% stake to a strategic investor. The company board, which met in the capital, on Friday gave its go-ahead to the proposal to rope in a strategic investor. “The board has approved the proposal. The company will soon invite expressions of interest from strategic investors,” IFCI chief executive officer RM Malla told ET after the board meeting.
He said international competitive bids will be invited which would allow both domestic and foreign players to bid for the stake.
Asked if existing foreign stakeholders like Morgan Stanley or Goldman Sachs will be eligible to bid, Mr Malla who was serving his last day at IFCI said these companies could bid if they meet the conditions placed in the EOI.
IFCI has appointed management consultant 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 to stake sale.
As per the proposal, strategic investors will have to make bids within a month of the memorandum of information being made public. Following this, IFCI will shortlist some investors. These investors will be allowed to do a detailed due diligence and submit a fresh bid indicating the price they are willing to pay for the 26% 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.
The company board also approved the first quarter results for FYO8. IFCI reported a net profit of Rs 246.86 crore in April-June 2007-08 compared to net loss of Rs 15.61 crore in the corresponding period of the previous fiscal. The company’s total income increased by 88.49% to Rs 485.57 crore in Q1 of 2007-08.
Source: economic times
