IFCI Ltd will divest at least 26% of its stake to a strategic investor through fresh issue of shares. The board of the financial institution has decided to appoint management consultant Ernst & Young to look for the strategic investor, IFCI told BSE.
The move is aimed at bailing out the ailing financial institution. In 2002 and 2003, government tried to merge the institution with Punjab National Bank. But, the move failed as the bank found the deal very costly as IFCIhad huge bad loans on its books. Government also tried to merge the institution with IDBI, which also failed.
Meanwhile, government so far has infused around Rs 4,600 crore in IFCI to revive it. The 2007-08 budget announced Rs 1,300 crore fresh infusion in the institution to meet its restructuring liabilities, including payment for outstanding loan of Rs 880 crore. To raise funds, the IFCI also sold its 7% stake in NSE and 8% stake in the ICRA through offer for sale.
Read more in The Times of India article.
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