Shriram Holdings divests 49-per cent in favour of Newbridge Capital

Chennai: Shriram Holdings (Madras) Private Limited, the holding company for the Shriram groups'' two truck financing companies, Shriram Transport Finance Company Limited and Shriram Overseas Finance Limited, has divested 49 per cent stake in favour of Newbridge Capital for $100 millon. The board of Shriram Holdings met today and decided to allot the shares to Newbridge Capital.

The Shriram Holdings also subscribed to 24,478,681 equity shares of Shriram Transport Finance at Rs.112 per share and 48,68,378 equity shares of Shriram Overseas Finance at Rs.67.20 per share by way of preferential allotment. Shriram Holdings also subscribed to 16,000,000 warrants in Shriram Transport Finance with an option to subscribe for equity shares which can be exercised before the expiry of 18 months.

The total investment in Shriram Transport Finance and Shriram Overseas Finance in the first round is Rs324.80 crore and this is expected to go up by another Rs161.28 crore on the exercise of the warrants by the Shriram Holdings.

This preferential allotment would trigger the open offer under the provisions of take over regulations and consequently, Shriram Holdings would have to acquire upto 20 per cent of equity of these companies through public offer, which is likely to be in April/May 2006.

Commenting about the Newbridge Capital''s investment, R Sridhar, managing director, Shriram Transport Finance said, "This investment by Newbridge Capital will facilitate growth and profitability of the company."

Meanwhile the merger of Shriram Investments Limited into Shriram Transport Finance was completed in November 2005. Now Shriram Transport Finance and Shriram Overseas Finance will be merged by June 2006. The merged company will be the larged asset based listed non banking finance company in the country.