Ifci Gets Rs 1,000 Crore Bail-Out
The government today cleared a Rs 1,000-crore bail-out package for IFCI by agreeing to infuse Rs 400 crore into the institution, with the balance Rs 600 crore to be brought in by its stakeholders, including IDBI, SBI, LIC and GIC. Post infusion, the paid-up capital of the institution will be Rs 1,645 crore.
After finance minister Yashwant Sinha met the top brass of financial institutions and banks, the government decided to beef up the tier-I capital of IFCI Ltd by subscribing to 20-year convertible debentures. The interest rate on convertible bonds is expected to be about 9.5 per cent per annum.
The capital infusion will be revenue-neutral, meaning that IFCI will invest the entire amount in dated government securities. The tenure of the gilts will be so chosen to match the interest income on the securities to the coupon to be paid on the convertible debentures.
Heads of the FIs have also agreed to consider favourably IFCI