SBI funds $100 mn global buys

SBI’s foray into funding of overseas takeovers by firms follows the encouragement given to such activity by the finance ministry. The ministry has made it clear that it would encourage domestic companies to set up, take over or pick up equity stakes in foreign companies. This is the first time SBI has opened its coffers for financing acquisition activities in such a big way.

‘‘In the past few months the bank has financed 16 companies for such activities overseas,’’ a senior bank official said.

The bank is currently doing this through a mix of both straight funding and participation in syndications, the official said, adding that SBI is providing both fund-based and non-fund based support to these domestic companies.

Recently, the bank had participated in a syndication programme for Moser Baer India’s acquisition of a German company. The bank has a $40 million exposure in the overseas acquisition by Moser Baer.

‘‘We are constantly looking for opportunities and also provide a lot of information to Indian companies to encourage their overseas forays,’’ commented the official.

The bank, whose overseas business is over $9 billion in size, is also, for the first time, providing a strong push to ‘‘third country’’ funding. This means SBI operations in some countries are now funding trading activities even in countries where the bank doesn’t have any presence.