India: Microfinance Firm Basix to Look for Overseas Investors if Banks don't Len...

Sep 2011
Mumbai, India, September, 01 2011 - Leading microfinance firm Basix, which is facing a huge debt crisis, on Thursday said it will wait till the middle of the month for an urgent Rs 450-crore funding from banks, failing which it will have no option but to look for foreign investors.

"If we are able to cross September 30, we are saved. Otherwise we are gone. We are urgently looking for a capital infusion of Rs 450 crore from banks by September 15. If that does not happen I have no option but to sell out to foreign investors," Bhartiya Samruddhi Finance or Basix Chairman Vijay Mahajan told PTI over phone from New Delhi.

Stating that his priority is to save the company, he said, "right now my single goal is to save Basix. I am not worried about who owns it. If banks are ready to own it I have no problem. But if the domestic banks don't lend to us, I will be forced to go abroad and find foreign investors. But it will be a shame if that happens.

"I am trying my level best and will wait till the middle of the month. I badly need Rs 450 crore, preferably in equity and preferential shares. I already have a little over Rs 200 crore and a commitment for Rs 115 crore equity and Rs 90 core preferential shares," Mahajan said.

He further said he is also negotiating with a number of banks, including the state-run industrial lender Sidbi, for an Rs 800-crore loan. "Out of this I am looking at a Rs 100-crore equity infusion, Rs 100-crore preferential shares and Rs 600 crore of it is fresh debt. I hope to close this by next week or so," the Basix head, who is also the chairman of the Washington-based global MFI body Cgap (Consultative Group to Assist the Poor) said.

Mahajan further said out of this, Sidbi has in-principle agreed to lend Rs 75 crore as preferential capital and Rs 125 crore as fresh debt. "But we want them to take up some equity, at least worth Rs 75 crore," he said.


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