JC Flowers buys 36% in Sicom for Rs350cr

Maharashtra govt will continue to be Sicom's chief promoter

New York-based JC Flowers, one of the world's largest private equity firm focused solely on the financial services sector, has picked up 36 per cent stake in the State Industrial Corporation of Maharashtra (Sicom), the investment arm of the Maharashtra government, for close to Rs 350 crore.

The deal values Sicom at Rs 972 crore. Sources said JC Flowers won the bid for the stake, which was put up for sale early this year by the Specified Undertaking of Unit Trust of India (SUUTI or UTI-1). SUUTI had invited bids from financial and strategic investors for selling its stake in Sicom.

The other two contenders for the stake were L&T Infrastructure and another US-based private fund.

Sources said for JC Flowers this was a good investment as Sicom, as an NBFC (non-banking financial company) had the rights to confiscate assets in case of defaults.

Also the Maharashtra government is planning to develop several SEZ (special economic zone) projects, for which Sicom could provide advisory services.

The Maharashtra government, which holds 49 per cent stake in Sicom, will continue to be its chief promoter. In addition to SUUTI's 36.5 per cent stake, another 3.5 per cent stake is held by UTI AMC. ICICI Securities was the sole advisor for the transaction.

Sources said in due course UTI AMC will also offload its stake in the company.

Sicom posted a net profit of Rs 59.11 crore in 2006-07, up 88 per cent from Rs 33.98 crore in the previous year.

The company offers advisory services to the state government, the Maharashtra Electricity Regulatory Commission and other corporate houses.

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WINNING BID

Sources said the deal, valued at Rs 972 crore, was a good investment as Sicom as an NBFC had the rights to confiscate assets in case of defaults

The other contenders were L&T Infrastructure and another US-based private fund

Maharashtra is planning to develop several SEZ projects, for which Sicom could provide advisory services