International Finance Corp., a unit of the World Bank, may consider buying as much as 10 percent of IFCI Ltd., India's oldest project financier, which is seeking a new investor.
“We are in talks with IFCI,'' Paolo Martelli, IFC's regional director for South Asia, said in an interview in New Delhi today.
IFCI, the third best performing stock on India's BSE500 Index this year, plans to sell a 26 percent stake to a strategic investor to improve its financial performance and exit non- performing assets or those that needed to be liquidated. The lender is also in talks with multilateral institutions.
The board on Dec. 1 agreed to allow Indian state-owned banks to convert bonds issued by IFCI into equity, the company said in a statement to the Bombay Stock Exchange on Dec. 4. State-owned insurers that have lent money to IFCI will convert a part of their bonds to retain their stake following the fresh share sale.
Blackstone Group LP, manager of the world's biggest buyout fund, and billionaire Wilbur Ross are among eight investors that are bidding for the stake in India's first auction of a lender.
A group led by New York-based buyout firm J.C. Flowers & Co. will also compete with Infrastructure Development Finance Co. for the stake in New Delhi-based IFCI.
A group comprising Sterlite Industries India Ltd. and Morgan Stanley, and a team consisting of Cargill Financial Services Corp. and Texas Pacific Group Flowers, along with the groups led by Ross and Flowers have carried out due diligence, IFCI said in the statement to the stock exchange.
IFCI has risen more than eightfold this year on the Bombay Stock Exchange. The shares fell 1.15 rupees, or 1.1 percent, to 105.8 rupees on the exchange today.
Source: Bloomberg