Shriram Capital, Shriram City Union to merge with Shriram Transport

Shriram group will merge Shriram Capital Ltd (SCL) and Shriram City Union Finance Ltd (SCUF) with Shriram Transport Finance Ltd (STFC) as part of restructuring in the group. The new entity will be named Shriram Finance Ltd.

The merged entity would have a combined Assets Under management (AUM) of over Rs 1.5 trillion and a distribution network of over 3500. All of these would be serviced by a team of 50,000 employees.

Pursuant to the merger, Shriram Transport will issue 1.55 shares for every one share of SCUF and 0.097 shares for every one share of SCL, STFC said in filing with BSE.

The boards of three companies have approved the merger of SCL & SCUF with STFC. The merger is subject to the approval of shareholders of three companies and regulatory bodies like Reserve Bank of India and National Housing Bank etc.

The merger would help the group bring together all its lending products – Commercial vehicles, Two-Wheeler Loans, Gold Loan, Personal Loan, Auto Loan & Small Enterprise Finance.

SCUF and STFC see this merger as an immense opportunity to strengthen their consumer offerings and provide a more holistic product basket encompassing all lending products.

The intent is also to create a comprehensive cross-sell program combining Insurance, broking & AMC businesses, including their Depositors, backed by a state of the art technology platform, it said.

Umesh Revankar, the Executive Vice Chairman and CEO of STFC, would be the Vice Chairman of the merged entity. Y S Chakravarti, the MD & CEO of Shriram City, would be the MD & CEO of the merged entity. Parag Sharma the Chief Financial Officer would work as a Whole Time Director in the board.

Morgan Stanley and ICICI Securities have acted as Financial Advisors for this transaction. The valuation exercise has been conducted by Bansi C Mehta & Co. and Ernst and Young (EY). EY has also assisted in the restructuring and taxation assessment for the transaction.

J&M Legal has been legal advisor. HSBC and JM Financial have helped with the Fairness opinion.

PWC will help Shriram Transport and Shriram City Union Finance navigate through the postmerger integration process.

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