Foreign Stake Likely In Icici Leasing Firm Icici In Talks With

ICICI managing director and chief executive officer K V Kamath said Our objective to float a holding company and spin-off the various leasing businesses into separate subsidiaries. The various leasing businesses would include financing of equipment, plant, machinery, consumer durables and automobiles.

The financial institution has already started negotiations with overases firms to pick up equity stakes in the leasing subsidiaries.

However, we will allow a majority stake to a foreign firm only in areas where ICICI lacks the technical expertise, Kamath said.

The non-banking finance companies will each focus on specilalised leasing businesses in areas of consumer durables, automoblies and housing finance.

 

The decision forms a part of ICICI's overall plan to diversify its activities into core business sectors by acting as a facilitator to provide package assistance in order to boost industrial growth.

The package assistance includes key functions like advisory services, technology support from foreign firms, infrastructure know-how and draw out optimal funding norms for the private sector.

The development financial institution has already initiated the process to revamping its advisory services cell.

Till now our role was restricted to providing advisory and consultancy services to state governments and public bodies in diverse areas like power, telecom and basic infrastructure.

We would now extend our services to the private sector as well, Kamath said.

The advisory services cell will play an effective role in identifying the causes of sickness for defaulting companies and offer effective solutions.

We will, however, continue to act tough against `wilful defaulters' and take strong actions against them, Kamath said.

For the current fiscal, ICICI has received a blanket approval from the finance ministry to raise $450 million from international markets out of which it has already syndicated loans amounting to $ 150 million. Although we are yet to finalise on the nature of instrument for raising the balance amount, we plan to link it up with the capital market, Kamath said.

The ICICI chief made it clear that this being an era of corporate governance, ICICI nominees on boards of companies will have to play a more active role in protecting the company's interests.

Corporates urged to raise funds overseas

Corporates will have to focus more on raising resources from international markets to beat the acute funds shortage. This was stated by ICICI managing director and chief executive officer K V Kamath in a meeting jointly organised by the Bengal Chamber and Indian Chamber of Commerce in Calcutta yesterday.

The ICICI chief said with the rising gap between demand and supply for money, companies were left with no alternative but to raise funds through judicious external borrowings. The demand for resources have almost doubled as a huge amounts are needed to fund the the country's infrastructure needs, he said. Under the present situation, interest rates are likely to remain high and companies will have to optimally blend the resources to bring down their average cost of funds, he observed. He said the private sector will now have to increasingly focus on exports and strive to achieve quality and remain price competitive. In an era of corporate governance, the management will have to face tougher questions from FIIs and GDR subscribers, he said.