Bangalore/Chennai: Shriram Group, Chennai, on Tuesday, announced that Newbridge Capital has offered to invest US$100 million (Rs448 crore) in three of its truck financing companies — Shriram Investments Ltd (SIL), Shriram Transport Finance Co Ltd (STFC) and Shriram Overseas Finance Ltd (SOFL).

The finance will be effected through Shriram's holding company for truck finance companies, Shriram Holdings (Madras) Private Limited, subject to regulatory and shareholder approvals. Newbridge Capital will subscribe to 49 per cent equity stake of Shriram Holdings (Madras) Private Limited.

The investment by Newbridge will help augment the Tier I capital of the truck finance companies and will help Shriram in building the transportation infrastructure and modernization of the trucking fleet of the country.

The truck finance companies are already in the midst of a merger process and it is expected that the merger of SIL into STFC, will be completed by November 2005 and the merger of SOFL into STFC will be completed during fiscal year2006-07. STFC, the ultimate merged entity, will then be the largest listed NBFC in India.

Shriram Board of Directors has also decided to tap the GDR market to raise US$60 million "at an appropriate time" after merging the three truck finance companies into one entity. The holding company would hold about 45 per cent stake in the merged entity Shriram Transport Finance.

The public holding in the merged entity would be at around 30 per cent.

Other stakeholders (in the three truck finance companies) including Citicorp Finance (India), UTI Bank, Reliance Capital, FMO (a Netherlands-based development financial institution) and Chrys Capital would hold the remaining stake.

The equity infusion by Newbridge Capital into the holding company would be channeled into the three truck financing companies, helping these entities to increase their lending activities.