News: 'Citi, Lehman lead race for IFCI stake'

(RTR 30/04/2007) Mumbai - Citigroup and Lehman Brothers are leading the race to acquire a 26 per cent strategic stake in Indian long-term lender IFCI Ltd, the Hindustan Times reported on Monday.

IFCI, which has reported losses for many years due to high levels of bad loans, appointed consultants Ernst & Young in March to find a strategic partner.

"Offers made by Citi and Lehman are more attractive than others. A decision over the stake sale is expected by the month-end," the newspaper quoted an unnamed investment banker, who it said was directly involved in the deal.

A Citigroup spokesman could not comment immediately, while officials at Lehman and IFCI could not be reached.

Traders see a turnaround in the lender given the profit potential from its equity holdings in companies such as National Stock Exchange, some of which it has recently sold. It also recently sold holdings in rating firm ICRA Ltd.

In April, sources told Reuters the New Delhi-based lender expected to get $250 million by selling a 26 per cent stake.

Other foreign banks such as Barclays were also in the fray for the stake, the paper said.