Ramesh Gelli lines up Rs 100 crore turnaround fund

Ramesh Gelli, the founder and former chairman and managing director of Global Trust Bank (GTB), is planning to set up a Rs 100 crore turnaround fund that will provide both management inputs and financial inputs for sick companies.

"The fund will be a merger of venture capital and term lending concepts for sick companies that apparently have basic feasibility and market opportunities. The operational processes of the fund are being worked out by a core team presently," Ramesh Gelli said at a select press meet here today.

On GTB and its proposed rights issue Gelli said that Morgan Stanley, the advisor to GTB on the issue was expected to submit its recommendation to the bank next week, post which a decision on the timing and size of the issue could be taken.

The bank might even consider a rights-cum-public offer, he indicated. "It is yet to be decided whether the rights issue will be made post the preferential offer to the strategic investors or before that," he said.

On the turnaround fund he said, "We will try and help the sick companies in terms of identifying new technology, new products and new markets", Gelli, who joined back GTB's board after a gap of about three years on February 15, said.

Initially, the fund will have a corpus of Rs 100 crore which will be expanded in a phased manner, he added.

The fund will rope in some of the domestic financial institutions, mutual funds and high networth individuals for contribution. It will focus primarily on sectors like IT, pharmaceuticals and bio-technology.

Gelli expects the fund to be operational by September this year.