Fullerton India may sell out
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In a major development that also reveals the underlying pressures on financing companies in the country, the promoter of Fullerton India Credit Company (FICC), a registered non-banking finance company in India, is looking at exiting India and scouting for a buyer. FICC is a wholly-owned subsidiary of Fullerton Financial Holdings, which in turn is a subsidiary of Temasek Holdings, Singapore.
Fullerton India, which has a net worth of about Rs 700 crore and an asset base of around Rs 3,500 crore, offers all kinds of consumer loans – home, auto and education. Besides, it also offers working capital loans and is also a micro finance provider in rural areas. It has a customer base of over a million across the country.
"The NBFC is approaching various financial services companies with a proposal to buy it out. At a price to book value of 1, a deal may materialise between Rs 700 crore and Rs 800 crore," a source close to the development told The Indian Express.
When contacted, the company denied any plan to sell out. "We confirm that Fullerton India is not considering any plans to sell any stake in the company to any party," said Ravi Shankar, Executive Vice President, marketing and rural business, Fullerton India.
The source, however, confirmed that the company is scouting for buyers. "The deal is being advised by Macquarie Capital and the company is offering 100 per cent stake in the Indian franchise," the source added.
Part of the $150 billion investment house Temasek, which is owned by the Singapore government, FICC's plan to wind up operations comes at a time when the business has incurred a loss of over Rs 700 crore in the financial year ended March 31, 2010. Acording to the source, the company has been preparing to sell its operations for a while now. It has restructured its business, significantly cut down on its branch presence from around 800 at the end of the financial year 2008-09 to about 350 at the end of the 2010-2011. The company has also reduced its employee base by about 30 per cent over the last couple of years.