IFCI was right in rejecting Sterlite bid: Chidambaram

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Bangalore, Dec 29 (UNI) Union Finance Minister P Chidambaram today approved the decision of State-owned IFCI's decision to reject the lone bid from a Consortium to buy its 26 per cent equity.

Speaking to newspersons after inaugurating Vijaya Bank's 1000th branch here, he said more offers would come when the bidding process starts again.

The Consortium of Sterlite Industries and Morgan Stanley had come out with a conditional bid to buy the stakes, which was rejected by the company. ''We received a single bid that was conditional. I feel IFCI was right in rejecting it. I am sure when a re-bid process starts, there will be more bidders,'' he said.

The Finance Minister said there would not be any outgo of cash on the issue of the Union Government to subscribe to the rights issue of the public sector State Bank of India.

Mr Chidambaram said the Government would pay for buying its stakes towards the Rights Issue from the dividends accrued from payments made by the SBI towards it. A redemption fund would be created for this purpose. Profits received from the additional capital rights issue would also be used towards the payment.

This means, SBI would use the money it has to pay to the Government as dividends and taxes in its business and treat it as additional Government equity in the bank.

UNI

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