IFC picks up 6.6% in LG Balakrishnan

The World Bank's private sector lending arm bought about 5.6 million shares in the company for an investment of $5 million.

International Finance Corp paid Rs 39.89 per share to pick up a 6.6 per cent stake in auto component maker LG Balakrishnan & Bros Ltd, a top official of the Indian company said on Friday.

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The World Bank's private sector lending arm bought about 5.6 million shares in the company for an investment of $5 million, Managing Director B Vijayakumar said over telephone.

"IFC has a lot of contacts in technical and other specialities which we would look to use," he said from the company's headquarters in Coimbatore.

After the issue of fresh shares, the founders' holding in the company would fall by 3 percentage points to 41 per cent, Vijayakumar said.

The price paid by IFC worked out to a premium of 12.7 per cent to the closing price of LGB shares at the BSE on Thursday.

IFC had said it also lent the company $15 million. LGB would use the funds to support its existing units and build a hot forging unit near Coimbatore.

On Friday noon, LGB shares fell 0.3 per cent to Rs 35.30 in a volatile Mumbai market.