|
Exim Bank ties up with West LB for factoring, forfeiting services
Anurag Joshi
Mumbai, July 31: The Export-Import Bank of India (Exim Bank) has joined hands with German bank West Deutsche Landesbank Girozentrale (West LB) for floating a new company in the country, which will provide factoring and forfeiting services to Indian exporters. Washington-based International Finance Corporation (IFC) is expected to shortly pick up a significant stake in the joint venture. "The company will have an initial paid-up capital of Rs 45 crore. We have received clearance from the Foreign Investment Promotion Board (FIPB), allowing West LB and IFC to pick up 65 per cent stake in the company," Exim Bank managing director, YB Desai said. "The equity sharing arrangement for the proposed venture will be West LB with 40 per cent stake, Exim Bank 35 per cent and 25 per cent to be taken by IFC," he added. "IFC has been approached with an offer of picking up stake in the company. The matter is being considered by them, with confirmation expected soon," Desai said."West LB would provide the new entity with expertise in terms of technology, procedures and product specialisation," West LB country representative in India, Veena Mankar said. The company will have its headquarters in Mumbai, with branch offices in Bangalore, Calcutta, Chennai and New Delhi. The Exim bank MD will be the chairman of the company. The company will become operational by the first quarter of next year. "We are targeting an annual turnover of $150-200 million during the first year of operations," the Exim Bank chief said, adding "Exim Bank had introduced forfeiting in 1994 on an agency basis and setting up a full-fledged company is a logical step for us to bring structured trade finance products to exporters particularly the small and medium enterprises." In addition to equity support, the three equity-holders will extend support to the new company through lines of credit at competitive pricing. Meanwhile, Exim Bank has signed a memorandum of understanding (MoU) with SBI Capital Markets, the investment banking arm of the State Bank of India, for forging partnerships to the mutual advantage to both entities. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
|