| cover drive: Uco Bank and LIC signed an MoU on Monday to develop bancassurance. The bank will act as a corporate agent for LIC. Picture shows LIC chairman S. B. Mathur (left) with Uco chief V. P. Shetty in Calcutta on Monday. Picture by Kishor Roy Chowdhury
Calcutta, Aug. 11: Life Insurance Corporation, Industrial Development Bank of India, General Insurance Corporation and Unit Trust of India (UTI), which together hold 46 per cent in Punjab Tractors, will jointly decide whether to participate in the open offer by CDC Capital Partners for an additional 20 per cent stake in the company.
LIC chairman S. B. Mathur said, “The FIs will jointly decide whether to participate in the open offer. We are currently doing an internal valuation of the open offer.”
LIC’s stand on the open offer gains significance as it holds the largest equity exposure of 16.24 per cent in Punjab Tractors.
LIC will soon hold discussions with other FIs on the matter.
CDC has made the open offer at Rs 153 — the price at which LIC purchased the Punjab government’s stake in the tractor company.
CDC has won a bid to buy a controlling 23.49 per cent stake in PTL at an investment of $47.2 million — the first instance of a foreign firm winning a bid in India’s privatisation programme.
Under the Indian takeover regulations, CDC then made an open offer for purchase of a further 20 per cent stake from shareholders.
Stake in UTI Bank
Commenting on the corporation increasing its stake in UTI Bank, Mathur said, “UTI Bank is currently held by UTI –I. LIC has a 14 per cent stake in UTI Bank. The government will now have to decide whether a strategic partner like UTI-I will increase its stake in the bank or the non-strategic partners like us will increase the stake in the bank.”
LIC has decided to make an additional investment of 15 to 20 per cent in select banks, including private ones. The corporation currently has an average 5 per cent stake in various banks, but these are portfolio holdings.
LIC and Calcutta-based Uco Bank may team up for loan syndication and project financing.
Uco Bank and LIC today signed a memorandum of understanding to develop bancassurance. Uco Bank will henceforth act as a corporate agent for LIC.