A C Muthiah to exit First Leasing at a premium

Chennai: A C Muthiah is in the final stage of negotiation with prospective buyers to make an exit from First Leasing Company. Muthiah has put one of India’s oldest leasing companies – floated in 1973 – on the block to drive his fertilizer business, SPIC, to profit. He has already sold stakes in privately-held Indo-Jordan Chemicals, and some of his real estate assets.

“Meetings with prospective investors are currently on. The deal is expected at a substantial premium over the book value of the company ,” sources said. Muthiah, the chairman of the company , could not be reached.

First Leasing Company introduced leasing in India 36 years ago and commenced hire-purchase transactions in 1986 and diversified into consumer finance in 1988. The company is promoted by Farouk Irani, a friend, and Muthiah .
The promoters – Irani and Muthiah – hold 27.48% stake in the company. It is not clear if Irani is keen on exiting the
company, though sources said that the entire block is up for sale.

Markets seem to have sensed a possible deal brewing in the counter. From around Rs 69 in mid-January , the stock rose to its 52-week high of Rs 100 last Thursday and closed at Rs 90.05 on the BSE Monday.