News: Barclays in talks to buy stake in ARCIL

(RTR 14/08/2006) Mumbai - British bank Barclays Plc is in talks to buy a 10 per cent stake in country's distressed assets firm Asset Reconstruction Co of India Ltd (Arcil) from ICICI Bank , a senior Barclays official said on Monday.

"We are considering a 10 per cent stake buy," Raju Shukla, managing director of investment banking at Barclays, told Reuters. "We had discussions with ICICI Bank, but the deal is subject to various regulatory approvals."

He declined to comment on the likely value of the deal.

ICICI, India's second-largest lender, holds about 30 per cent in Arcil, and the rest is held by many banks, including State Bank of India and IDBI Ltd.

Citicorp Finance Ltd, a unit of Citigroup, also holds a 4.4 per cent stake in Arcil, which bought bad debts worth about Rs 21,100 crore ($4.53 billion) from various banks in the year to March 2006.

The latest proposed investment in India by Barclays is part of its expansion plans in the fast-growing economy which offers business potential in the financial sector, Shukla said.

"We are active in dealing with distressed assets across the region and this will be an extension of our services here," he said.

Arcil estimates total stock of distressed assets in India, including that of finance companies and co-operative banks, at about 2.5 trillion rupees.

Barclays is one of the most active arrangers of fund raising for Indian companies in both domestic and overseas markets. It leads the convertibles market, managing more than a quarter of the total $3.5 billion raised in 2005.