Chennai: 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.

The 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.

As 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.

Meanwhile the three Shriram group companies have convened an extra ordinary general meeting on 3^rd February 2005 to consider the issue of shares to ChrysCapital by way of preferential allotment.

The total investments by ChrysCapital in the three companies put together will be around Rs100 crore.

In 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.

Speaking 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."

The 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.

He 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.