Chennai: In a composite scheme of arrangement and amalgamation, the Shriram Group’s two non-banking finance companies (NBFC) – Shriram City Union Finance Ltd, and Shriram Capital Ltd (unlisted) – will merge with another listed company Shriram Transport Finance Ltd, the group said.
Subsequently, Shriram Transport will be called Shriram Finance Ltd.
Post merger, the Shriram Transport/Shriram Finance would have a combined asset under management (AUM) of over Rs 1,50,000 crore, over two crore customers served till date, and a distribution network of over 3,500. All of these would be serviced by a team of over 50,000 employees.
The Boards of three companies at their meeting on Monday announced the major rejig to create a financial powerhouse and become the largest retail finance NBFC in the country.
The merger is subject to the approval of shareholders of the three companies and the regulatory authorities like the Reserve Bank of India (RBI), the Competition Commission of India (CCI), the Insurance Regulatory and Development Authority of India (IRDAI), the National Housing Bank, the National Company Law Tribunal (NCLT) and others.
As regards the share swap ratio, Shriram Transport -to be called Shriram Finance – will issue 1.55 shares for every 1 share of Shriram City Union Finance and 0.09783305 share for every one share of Shriram Capital.
This translates into shareholders of Shriram Capital will get one share of Shriram Transport for every one share held.
Further, the shareholders of Shriram Capital will get 1.55 shares of Shriram Transport for every one share of Shriram City Union held by the former.
According to the statement issued by the Shriram Group, AUmesh Revankar, Executive Vice Chairman and CEO of Shriram Transport, would be the Vice Chairman of the merged entity.
Y.S. Chakravarti, the MD & CEO of Shriram City Union, would be the MD & CEO of the merged entity.
The board of Shriram Transport also approved the appointment of Parag Sharma, Chief Financial Officer, as a Whole Time Director in the board.
PwC will help Shriram Transport and Shriram City Union navigate through the post merger integration process, the group said.