N Balasubramanian, chairman of ailing industrial lender IFCI, which is looking for a strategic partner for stake sale, has resigned citing his conflicting role as adviser to one of the bidders.
IFCI, incidentally, may lose out on a Rs 1,300-crore tranche of a Rs 5,220 crore bail-out package from the government. This is because the government feels that IFCI?s recent turnaround and the decision to rope in strategic investors show the company does not require such support.
The development would not affect the process of 26% cent stake sale as financial bids were yet to be invited, a key company executive said.
Balasubramanian, who resigned with immediate effect before expressions of interest (EOI) from 10 entities were opened on Saturday, was no longer IFCI chairman, the executive said, speaking on the condition of anonymity.
The board will ratify his decision, besides taking up?other routine issues? at its meeting scheduled for September 20. The board meeting would be followed by a shareholders? meeting the next day, the official added.
Balasubramanian was also adviser to Standard Chartered
Bank, one of the entities in a consortium that has submitted a EoI. A consortium, led by WL Ross, that includes Standard Chartered Bank, Goldman Sachs and HDFC Ltd, has submitted the EoI. Efforts to revive
IFCI gathered steam after Balasubramanian assumed charge of the office in early August this year. EoIs were invited from August 13.
Nine other companies and consortia are interested in picking up stakes in IFCI. Of them, seven are stand-alone and they include financial institutions IDFC, Kotak Mahindra Bank, GE Capital, Cargill, French banking company Nataxis, US-based private equity fund managers Blackstone and Newbridge.
On March 31, 2007, Morgan Stanley and Goldman Sachs had 2.5% and 3.3% stake, respectively, in IFCI.
The company will evaluate the EoIs and announce the names of shortlisted investors on September 25. The other consortia include Punjab National Bank with Shinsei Bank of Japan and US-based investor JC Flowers and Morgan Stanley with Sterlite Industries.
?PTI