NEWBRIDGE Capital has picked up 49 per cent stake in Shriram Holdings (Madras) Pvt Ltd, (SHMPL) the holding company for Shriram group's truck finance companies, for $100 million, as announced in September last.
SHMPL has subscribed to 2,44,78,681 equity shares of Shriram Transport Finance Company Ltd (STFC) at Rs 112 per share and 48,68,378 equity shares of Shriram Overseas Finance Ltd (SOFL) at Rs 67.20 per share by way of preferential allotment. SHMPL has also subscribed to 1,60,00,000 warrants in STFC with an option to subscribe for equity shares which can be exercised before the expiry of 18 months.
The board meetings of STFC and SOFL were held on Thursday at Chennai to allot shares and warrants to SHMPL. The total investment in STFC and SOFL, put together, in the first round is Rs 324.80 crore, which would go up by another Rs 161.28 crore on exercise of the option within 18 months by SHMPL.
This preferential allotment would trigger open offer under the takeover regulations and consequently, SHMPL would have to acquire up to 20 per cent of equity of these companies through public offer, which is likely to be in April/May. The merger of Shriram Investments Ltd into STFC was completed in November 2005. The boards of STFC and SOFL have now decided to merge SOFL into STFC and it is expected that this merger will be completed by June. The merged entity, will then be the largest asset-based listed NBFC in India