The Australia and New Zealand Banking group is contemplating retaining its global structured finance activity in India, conducted by the ANZ Investment Bank, and not merging it with Standard Chartered Grindlays.
Although the modalities have not as yet been worked out, according to Reserve Bank of India and Securities and Exchange Board of India rules, the new entity will have to be a subsidiary of the parent ANZ, a banking source stated. At present, ANZ Investment Bank is a division of corporate finance within ANZ Grindlays Bank.
Sources told Business Standard, "The intent is to keep both project and structured finance with the ANZ group as of now as it possesses a large number of corporate relationships. The deal has not yet been formalised. Therefore, there is some level of uncertainty."
ANZ Investment Bank was involved in the divestment of Modern Foods to Hindustan Lever Ltd. It has also received the mandate for the divestment of Indian Airlines which is expected to be completed by 2002. It has also bid for other central divestment programmes.
According to sources, ANZ intends to keep structured finance with itself because Standard Chartered does not have a presence in the investment banking business. ANZ Investment Bank has a significant number of important mandates and an established brand name.
The official spokesperson of Standard Chartered Bank said, "Stanchart retains the first right to retain this division or refuse the same. Only after a decision is taken on our behalf could the next step be taken."
However, ANZ Grindlays Bank's official spokesperson denied any move of retaining the division. In the current situation, ANZ would have to depend on Stanchart approval before proceeding on its own.
The division has a highly skilled professional team and, therefore, any reorganisation could disrupt the current level of comfort which their customers possess.
The investment bank was one of the principal arrangers to the $1.8 billion project finance for the second phase of the Dabhol Power project. It was also involved with the successful syndicated loans for the liquefied natural gas project for Enron Power Corporation.
