Financial Daily from THE HINDU group of publications
Tuesday, Oct 01, 2002
Money & Banking
Maharashtra, UTI to divest 26 pc stake in SICOM
MUMBAI, Sept. 30
THE Government of Maharashtra and Unit Trust of India will together divest 26 per cent stake in SICOM Ltd; KPMG has already been entrusted with arranging this deal, according to Mr R.D. Pradhan, Chairman, SICOM.
He told a news conference here today that the Government of Maharashtra and UTI would divest roughly equal stakes in SICOM. Currently the Maharashtra Government holds 49 per stake and UTI 40 per cent.
"We are looking for a strategic alliance with a bank whom we could divest to,'' said Mr Pradhan.
SICOM had recently lost its status as a development financial institution and got classified as a non-banking financial company, coming under stricter financial norms and discipline prescribed by RBI.
The company's net profit for the year 2001-2002 fell to Rs 5 crore from Rs 10 crore in the previous year. Its net worth eroded from Rs 232 crore to Rs 162 crore. The company did a write-off of NPAs worth Rs 32 crore in 2000-2001.
It has decided to partially repay its subordinate loan to GoM, in order to shore up its net worth to Rs 277 crore. This will also enable it to maintain a capital adequacy ratio of 18.85 per cent. It has an asset base of Rs 1,874 crore.
SICOM had decided to undertake measures to restructure its finance and human resource department as well as to re-orient project activities in select fields, he said.
The financial restructuring should ensure that by April next, NPA levels are reduced to less than 10 per cent and that SICOM will be in a position to offer a wide range of financial services to several projects which will be of direct benefit to Maharashtra.
On the human resource restructuring front, VRS had reduced staff strength from 267 to 180. Further restructuring of available professional staff was being undertaken so that it could undertake consultancy and advisory services. There had been several enquiries for such services, he said.
SICOM's activities are being refocussed from purely financing the SME sector to financing infrastructure projects, information technology-enabled services, media and entertainment and also a few sectors of the manufacturing industry. SICOM housing will soon be hived off.
Mr Pradhan said there was no intention on SICOM's part to take over United Western Bank in which it had a 10 per cent stake. "We had merely asked for at least two directors to be on its board,'' he said.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line