IDBI will pave way for the entry of PFG into IIMCO by part divestment of its equity and preference shareholding in IIMCO for which it is expected to pocket around Rs 25-35 crore. ``IIMCO will also raise additional equity from PFG,'' sources from the asset management company told The Financial Express. The shareholder approval to this effect is expected to be sought soon.

The current paid-up equity capital of IIMCO is Rs 5 crore, and its authorised capital Rs 10 crore. The term-lending institution's asset management company has a corpus of Rs 619 crore as on March 31, 1999, and currently has six mutual fund schemes, which include both equity and debt schemes.

``As perthe terms of the MoU, the Principal Finance Group, which manages $106 billion worth funds worldwide, will acquire 50 per cent stake in IDBI's existing asset management company,'' Principal Financial Group global manager Sanjay Sachdev told The Financial Express at the time of signing the MoU.

IIMCO sources added the asset management company is likely to be headed by a nominee from the Principal Financial Group. The IDBI representative, CK Lakshminarayanan, who has put in his papers recently, will continue at the helm of affairs of IIMCO till the end of this month. ``Sanjay Sachdev is the most likely candidate to head IIMCO for the initial period,'' IIMCO sources said.

Established in 1879 and a member of the Fortune 500 and Fortune's Most Admired Companies, the Principal Financial Group is a leading provider of a wide range of financial products and services to more than 10 million customers worldwide including retirement and investment services, life and health insurance and mortgage banking.

PFG isthe fourth largest life insurance company (by premium) in the US. Of the $108 billion assets managed by it, almost $36 billion is in institutional and rest in retail. Further, 85 per cent of its assets are in equity and 15 per cent in debt funds and bonds.

IDBI's established retail distribution network will also extend support to this venture, which is planning to expand its business portfolio by introducing new products like venture capital funds and private equity business.