From Majority to Minority Shareholders

and a look at what debt restructuring means for mfi promoters.

“I have a 45% stake,” says a promoter of a leading MFI. “If we restructure Rs 1,000 crore of debt, my stake will drop to about 1%.” This will be a setback for promoters of MFIs such as Spandana Spoorthy and Share Microfin, which bought back large quantities of shares from their borrowers – mostly poor women – between 2005 and 2007 for a pittance just before their business took off. They built the business with an objective of going public at some point and realising those gains.

But if they are reduced to minority shareholders, they will not be able to realise those gains. more here.