Tata Finance Officials Meet Rbi To Talk Revival Plan

The Tata Finance brass today met the Reserve Bank of India (RBI) officials on the revival of the beleaguered non-banking finance arm of the Tatas. Company sources confirmed the meeting but refused the divulge further information.

Sources in the know of the development said the Tata brass unveiled the blueprint for bringing back the company to the rail by a combination of measures such as equity and liquidity infusion through sale of real estate and pruning of Tata Finance subsidiaries.

Tata Finance has already asked the RBI time till March 2003 for Rs 300 crore of equity infusion required to prop up its capital adequacy ratio to 12 per cent. Of this, Rs 100 crore is likely to be infused by the end of December, another Rs 100 crore by March next year and the rest by December 2002. TFL's capital adequacy ratio currently stands at five per cent.

 

In addition to that, TFL is planning to sell of its land, building and other non-core assets as well.

The non-banking finance company after huge loss made in the stock market dealing is planning to focus on its core business of commercial vehicle financing. The board of the company at its meeting held on December 4 has decided the sale of non-core activities, as a part of the restructuring process. Although there is no final decision on any of these issues, various alternatives are being examined to sell and transfer of leased assets, windmill project and credit cards division of the Company, subject to the approval of the shareholders. The company is already in talks with the American Express to sell its take in Tata Finance Amex Private Ltd.

The company is also looking for strategic partner and has also revamped its board. The company posted a loss of Rs 395 crore due to a provision of Rs 315 crore towards loans and investment in affiliate companies.