ING raises $175 mln from Kotak stake sale - sources

MUMBAI Thu Jun 24, 2010 11:50am IST

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MUMBAI (Reuters) - Dutch financial services group ING(ING.AS) raised $175 million by selling its entire 3.1 percent stake in India's Kotak Mahindra Bank(KTKM.BO), two sources with direct knowledge of the deal said on Thursday.

The sale of 10.8 million shares in stock market block deals was done at 750 rupees a share, the sources told Reuters. Another source had told Reuters on Wednesday that shares would be sold in the range of 730-750 rupees each.

The final sale price represent a 4.2 percent discount to Wednesday's close price of 783.20 rupees.

Anneloes Geldermans, a spokeswoman for ING in Amsterdam confirmed that the Dutch group had sold its 3.1 percent stake in the Indian lender, but refused comment on the price at which the deal was struck.

ING's decision to sell its stake in Kotak was taken after "careful consideration" and is part of the bank's "back to basics" programme announced in April 2009, which included a planned 8 billion euros in asset sales, she said.

Shares in Kotak Mahindra, which the market values at roughly $6 billion, fell as much as 3.4 percent after the block deal to their lowest in a week. By 0550 GMT, shares in Kotak Mahindra were down 2.2 percent at 766 rupees.

Citibank was the sole adviser to the deal, the sources said.

On Tuesday, another Dutch lender, Rabobank, moved a step closer to setting up its own banking unit in India as it cut its stake in mid-sized local lender Yes BankYESB for about $213 million.

Citi was also the adviser on that deal, a separate source had said on Tuesday.

Standard Chartered, Credit Suisse and Citibank are expanding their services and Goldman Sachs has applied for a banking licence in India, whose economy is forecast to grow more than 8 percent this fiscal year.

(Reporting by Sumeet Chatterjee and Tony Munroe; additional reporting by Amsterdam newsroom; Editing by Unnikrishnan Nair)

(For more business news on Reuters India click in.reuters.com)

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