Search the Internet          Tips  Sites: Finance, Investment

ICICI Bank arm to bid for EIL with Sun F&C

Bhupesh Bhandari in New Delhi

In the first instance of financial investors coming together to acquire a public sector unit, ICICI Venture Funds Management Company, a subsidiary of ICICI Bank, has been roped in by Sun F&C to become part of the consortium of financial investors bidding for Engineers India Ltd. Citigroup, New Bridge Capital and CDC are the other members of the consortium.

The divestment process in EIL has reached an advanced stage and many bidders, including the consortium headed by Sun F&C and ICICI Venture, have already completed their due diligence. The divestment process is likely to be completed by October.

Sources said the rationale behind Sun F&C opting for ICICI Venture was the latter's expertise and vast domain knowledge of the working of Indian corporates. ICICI Venture is the oldest venture capital firm in the country with assets worth more than $250 million, and is the first finance company to participate in the divestment process independently.

ICICI Venture's strategy to play a major role in the divestment of public sector undertakings is seen as part of its thrust in private equity to unlock values in these enterprises through management buyouts. In the past, ICICI Venture had stated the existing managements of many of these units needed support through financial reengineering to convert them into robust companies.

EIL, set up in 1965, has emerged as one of the leading engineering and technical consultancy companies in the country and posted a turnover of Rs 797 crore for the year ended March 2001 and a net profit of Rs 123.83 crore. The company has a total equity base of Rs 56 crore. The company works in the areas of petroleum refineries, pipeline, oil and gas, ports and power.

The government currently holds about 90 per cent of the equity in the company and has chalked out plans to divest 51 per cent of its stake. Corporates which had put in their expression of interest included Reliance Industries, Tata Steel, Essar, the Oil and Natural Gas Corporation and Bharat Heavy Electricals.

Powered by

ALSO READ:
The Divestment Development
More Money Headlines