Infrastructure Development Finance Company (IDFC) is in talks with GE Commercial Finance, the financial arm of GE, to acquire about 35% stake in the latter’s construction equipment finance business in India. Sources close to the development said that GE is looking at hiving off its construction equipment finance business into a joint venture company. IDFC will hold about 35% stake in the JV company and GE Commercial Finance will hold the remaining 65%. At a later stage, a third investor may also be inducted, sources said.
Although the exact quantum of investment could not be verified, industry sources said the valuation of the JV company would be around Rs 650-800 crore.
When contacted by ET, IDFC executive director Vikram Limaye denied any such plans and said: “We are not getting into any JV with GE.”
A GE spokesperson said: “We would like to highlight that GE does not respond to market rumours or speculation. India is a critical growth market for GE and we are committed to growing our business in the country. We are constantly evaluating opportunities to strengthen our presence in the market.” According to sources, talks were initiated in the beginning of the current year and the process pertaining to the transaction should have ideally been completed by the middle of the year. “Talks are on but the final agreement might take some time because of the slowdown in global markets,” said a source.
GE Commercial Finance globally has assets of over $335 billion and is one of General Electric’s largest growth engines. It caters to industries including healthcare, manufacturing, construction, infrastructure and equipment, among others. The company’s real estate portfolio spans across all market segments — from industrial, commercial and office space to residential and recreational developments.
Source : Economic Times