JP Morgan to form asset reconstruction business with Yes Bank, Bank of Baroda, Bank of India and Union Bank

JP Morgan is setting up an asset reconstruction company in India along with public sector banks Bank of India, Bank of Baroda, Union Bank of India and private sector bank Yes Bank. The group has applied to the Reserve Bank of India (RBI) for its approval. JP Morgan will act as the knowledge partner in the joint venture, which will have an initial capital of Rs. 100 crores. If and when the RBI’s approval is received, the four India banks will form a company in which JP Morgan will pick up a 27% equity stake. For this, it will have to get the permission of the Foreign Investment Promotion Board, since the investment will be treated as foreign direct investment. At present, the cap on FDI in asset reconstruction companies is at 49%.

Union Bank was earlier supposed to partner Standard Chartered Bank in the latter’s ARC set-up. However, due to delays, Union Bank has now switched over to the JP Morgan side of the business.

Read more in the Business Standard article.
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JP Morgan to set up asset reconstruction business in India

Bank of India forms life insurance JV with Dai-Ichi Mutual Life Insurance and Union Bank

Bank of India has formed a life insurance JV with Japanese company Dai-Ichi Mutual Life Insurance Company and Union Bank of India. Bank of India will hold a 51% stake in the JV, while 26% will be held by Dai-Ichi and 23% by Union Bank of India. The bank is also contemplating a joint venture in Zambia soon. It has also entered into a strategic alliance with Union Bank of India and IDFC for loan syndication, international business, cash management, cheque collection and training.

Article in The Economic Times.

Premier Tissues to acquire UK tissue converting company

Bangalore-based Premier Tissues, a manufacturer and exporter of tissue papers, is acquiring an UK-based tissue converting company in a deal worth £8-10 mn. In addition to the company’s bankers, Bank of India and the EXIM Bank have also shown interest in financing the deal. The company is also holding talks with a couple of venture capital firms to fund the deal. The acquisition is expected to be consummated by March 2007. Presently, Premier Tissues is one of the largest exporters of tissue products to UK. By February 2007, with this expansion, the company will be able to export about 700 tonnes of tissue products per month.

Read The Economic Times article.

It is to be noted that Bennett, Coleman & Co. (BCCL), the media group that owns The Times of India and The Economic Times, had recently picked up 6.42% stake in Premier Tissues. The company was set up in 1998 in technical collaboration with Premier Tissues of Malaysia. It now has a sales revenue of 35 crore, of which up to 25% comes from exports.