Sundaram Finance To Buy Out Newton From Mutual Fund

The Chennai-based Sundaram Finance has decided to acquire the 39 per cent stake in Newton Investment Management, its joint venture partner in Sundaram Mutual Fund.

T P Raman, chief of Sundaram Mutual Fund, said the valuations will be worked out soon. The valuer, who will work out the worth of the stake being bought, is yet to be appointed. "We have intimated the Securities and Exchange Board of India about our intention today," Raman said.

Appointing a valuer and working out the deal size is expected to be done within a month.

The UK-based Newton group which had entered into the joint venture with a stake of 39 per cent at Rs 15 crore, had been taken over by Mellon Financial Corporation last year. Raman said the decision to buy out their joint venture partner had its origins in the latter's acquisition, "and a perceived shift in strategic perspectives." He agreed that in the changed circumstances there were some doubts on whether the objectives of the new entity would be in line with Sundaram's objectives.

 

The Mellon group also did not raise any objections to the buyout, Raman said, stressing that the parting was most amicable. Sundaram MF has around Rs 800 crore as assets under management.

Raman said with the buoyancy in the debt market, "we are aggressively pushing our income funds." Sundaram Bond Saver, the flagship scheme of the fund, was judged the winner in the open-ended debt funds category of 2001, by Crisil-Best Funds Awards.