Private equity fund, ChrysCapital III, LLC, Mauritius,
has decided to take 20.60 per cent in the equity of
three Shriram group truck financing companies
Shriram Investments Limited, Shriram Transport Finance
Company Limited and Shriram Overseas Finance Limited,
through the preferential allotment route.
cost of acquisition of each Rs10 face value share will
be Rs35 in the case of Shriram Investments and Shriram
Transport Finance. In respect of Shriram Overseas Finance
it is Rs21 per share a premium of Rs11 per share.
all the three Shriram group companies are listed ones
and the acquisition is over 20 per cent, ChrysCapital
will be making an open offer. "The open offer will
be made sometime in April 2005," said Ashish Dhawan,
senior managing director. According to him, the fund
has investible corpus of Rs1,000 crore.
the three Shriram group companies have convened an extra
ordinary general meeting on 3rd February 2005 to consider
the issue of shares to ChrysCapital by way of preferential
total investments by ChrysCapital in the three companies
put together will be around Rs100 crore.
addition to this ChrysCapital has been given the option
of subscribing to 4.34 per cent of equity by way of
warrants in Shriram Investments and Shriram Transport
Finance. The option will have to be exercised within
18 months. This would entail an additional investment
of Rs20 crore on ChrysCapital's part.
about the deal Shriram group chairman R Thyagarajan
said, "Post acquisition by ChrysCapital the promoter
group's holding in the three companies will be 27 per
cent down from 39 per cent. The equity fund's holding
in the three outfits will be 24 per cent."
total equity of the three companies will go up to Rs145
crore from the present level of Rs115 crore. According
to Thyagarajan, the three companies will be merged together
in a couple of years.
also said that another group finance outfit, Shiram
City Union Finance Company Limited, will get out of
truck financing business and focus on consumer finance.