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Sabre sees major role in banking M&A space

February 12, 2003 12:43 IST

Rana Talwar, former group CEO, Standard CharteredGurvinder Singh Rana Talwar, former group chief executive officer of Standard Chartered Plc, is hoping to play a major role in the consolidation that he anticipates in the Indian banking sector by acquiring management control and merging troubled banks.

This is the focus of his India plans which he wants to implement through Sabre Capital Worldwide, a cash-rich London-based fund of which he is majority shareholder.

"We are here to look at all troubled institutions. We have the capital and management expertise," Talwar told Business Standard in an interview after he stepped down as StanChart chief in November 2001 following a boardroom battle.

So far, Talwar has held discussions for acquiring management control in Centurion Bank. One round of talks has been held with Reserve Bank of India governor Bimal Jalan. The bank's chairman V Janakiraman also visited Sabre Capital's Singapore office last week.

The structure of the deal is still being worked out, but will involve a change and enlargement in shareholding, with Sabre Capital leading a new set of investors. The existing overseas investors are expected to invest fresh capital.

"Initially, we thought it would require a lot of capital. But it is possible to structure the deal in such a way that you will not need too much capital at this point," says Talwar, who was unwilling to discuss more detail.

The major foreign stakeholders in the bank are Keppel Bank (around 17.5 per cent through a Mauritian subsidiary), the Asian Development Bank (10.22 per cent), and the International Finance Corporation (8.36 per cent).

Asked whether the existing norm of capping voting rights at 10 per cent, irrespective of the size of their stake, will impede managing the bank, Talwar suggested that he could consider a shareholders' agreement that gives his fund management control in Centurion.

Of other plans, Talwar said the takeover of Global Trust, the troubled private bank in which the RBI removed the original promoters, had been suggested to him.

"We may look into it. We have the combination of capital and management expertise and we can look at all troubled institutions that can be revived," he said.

Sabre Capital is looking at similar opportunities in East Europe, Middle East and Indonesia.

The other stakeholders in Sabre Capital are Rajiv Maliwal, former head of StanChart's private equity operations in Singapore, and Nigel Kenny, the bank's former finance director.

"Money is not an issue. We have financial backers. We can go to any extent, spend any amount, depending on the deal," Talwar said.

Talwar refused to discuss his personal net worth. Last year, StanChart announced a substantial compensation package for him worth £3.2 million.

Kenny, who took voluntary retirement, received at least £5,46,000 apart from the year's bonus.

As a CEO of StanChart, Talwar was instrumental in five acquisitions of $3 billion over 1999 and 2000, of which the purchase of the Grindlay's business in India, West and South Asia for $ 1.34 billion was among the largest deals.
Tamal Bandyopadhyay in Mumbai