Fis Call Meet To Decide Stand On Sterlite, Icl Bids

Financial institutions (FIs), Unit Trust of India and Life Insurance Corporation, may prefer to wait for Sterlites revised offer after Alcans counter-offer yesterday before taking a decision on their stakes in Indal.

The FIs will discuss their stand on the takeover attempts being made on Indal as well as Raasi Cements which is being eyed by India Cements in the next couple of days.

An FI source said the venue for the meeting has not been decided yet but a meeting of all the FIs will take place in the next couple of days and our stand on the two takeover cases will be considered and made known. News of some FIs planning to sell their stakes is not true. We are meeting and then a decision will be taken, said an FI official.

Domestic institutions are of the view that they may prefer waiting for the best offer in the contest. They have already made it clear that they consider Sterlites offer to be too low and that they may consider selling if offered a better price.

A senior UTI official earlier said if the contest stretches, Sterlite may have to pay more. We have to assess the situation taking into consideration the offer prices of Sterlite and Alcan. If there is a revised offer by Sterlite, we have to take into account the financials involved for Sterlite as we hold a stake in it too, he said.

Sources said the likely line the FIs may take is the following: The institutions may give a chance to the existing Indal management (which according to the FIs has not done a good job until now) to present their plans for the company. And in the Raasi case, the FIs are to stay neutral because the institutions have no problems with the incumbent management which has managed the company well.

Normally we do not interfere in these matters (takeovers). We stay neutral. We come into the picture only if we feel that the takeover will go against the shareholders and the future of the company, FI sources said.

On the Indal takeover case, the sources said: The Indal management has not done a good job until now. We will give them a chance to present their plans for the company. We would also consider the plans of the new promoter. And then we shall take a decision.

In the case of Raasi, we have no problems with the current management or with the company which is planning the takeover. So we might stay neutral, the sources said.