New Delhi, June 12: The board of IFCI Ltd today agreed to initiate the modalities of lowering the Life Insurance Corporation of India’s (LIC) holding in the company to 8.39 per cent.

State-owned LIC had earlier approached the IFCI management to reduce its holding from 11.39 per cent to 8.39 per cent, the level prior to the conversion of its debt into equity earlier this year.

“IFCI wants to know the exact provisions of the Companies Act, under which the process can be initiated since the LIC never wanted to raise its stake in the non-banking finance company,” said officials.

The board of Delhi-based IFCI also considered the induction of a strategic investor and issues relating to optionally convertible debentures held by the government. However, company officials said that no final decision had been taken.

IFCI is waiting to hear from the government on the strategy it should adopt for restructuring its operations, which have been in a pause mode for almost a decade.

Last year IFCI had communicated its failure to rope in a strategic investor to the government and also reported the apprehensions of the bidders of a strategic stake about the convertible bonds issued to the Centre, which helped it tide over a financial crisis.

The government had earlier told IFCI that it would not exercise its conversion option in respect of these debentures aggregating to Rs 923 crore. The Centre had also promised IFCI a further Rs 1,300 crore but held the money back as the financial institution was raising funds through a strategic stake sale.