Global investor Celestial Finance of the UK will pick up close to 5 per cent stake in domestic consumer electronics firm BPL Ltd. The foreign company will acquire the stake from Merico Finance, a local investor.

This will be the first foreign direct investment in BPL, ahead of a possible investment by its existing technical collaborator, Sanyo of Japan.

"We are moving on in our negotiations with Sanyo, and hope to have some good news very soon," BPL Chairman Ajit Nambiar said.

The office of BPL's company secretary said the firm had sought permission from the Reserve Bank of India as well as the Foreign Investment Promotion Board for the investment.

"It is a straight deal. A local finance company is selling its shares to an international investor. Since this is the first time foreign investment is coming directly to the company, we required an endorsement not only by the RBI but by the FIPB as well. We have applied, and we are expecting their approval," an executive from Bangalore said.

He also clarified that the stake being acquired was less than 5 per cent.

It is not known whether the transaction involves a premium, considering BPL has suffered losses and a decline in market share in the past few months. The company has submitted a restructuring package to financial institutions and other lenders. However, revival depends largely on a tie-up with Sanyo.

A BPL executive said representatives of Sanyo were expected soon in Bangalore for another round of negotiations. Sanyo is demanding certain restructuring initiatives, like hiving off several units, ahead of the equity investment.

BPL declined to comment on this.