IFCI remains committed to inducting strategic partner: CEO

The country's oldest financial institution, IFCI, today reaffirmed its commitment to induct a strategic partner. 

"The board is committed to inducting a strategic investor. We are just contemplating on what is going to be time for such investment given the market condition," IFCI CEO and Managing Director Atul K Rai told shareholders at the Annual General Meeting (AGM) here.     

Many entities who were considered for strategic investment, he said, have either become extinct or struggling for existence.     

In 2007, the IFCI board had aborted the process for 26 per cent equity sale to a strategic partner as it did not agree with the bidders' demand for management control.     

NRI billionaire Anil Aggarwal-led Sterlite Industries, jointly with global investment banking giant Morgan Stanley, had emerged as the front-runner by quoting the highest price.    

Other issue that is holding IFCI from disinvesting is the lack of clarity on the optionally convertible debentures worth Rs 523 crore issued by the government.

If the government converts these bonds into shares, it becomes a shareholder in the company. Then the strategic investor has to deal with the government as the shareholder, Rai had said a few months ago.    

This should be clarified before resuming the process of strategic sale, Rai had said.    

IFCI reported a net profit of Rs 142.50 crore for the quarter ended March 31, 2009, and declared a dividend after a gap of 10 years. The company had a net loss of Rs 42.5 crore in the March quarter of FY'08.     

Total income, however, decreased to Rs 369.5 crore during the quarter from Rs 451.3 crore in the same quarter ended March 31, 2008.      

The company gave a dividend of 8 per cent for the year ended March 31, 2009, first time after a gap of 10 years. The net profit of the company during 2008-09 declined by 35.5 per cent to Rs 657.1 crore against Rs 1,020.5 crore in the previous fiscal.