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Tuesday, Sep 28, 2004

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TVS cos Sundaram Finance, Lakshmi General to merge

Our Bureau

Chennai , Sept. 27

TWO TVS Group companies, Sundaram Finance Ltd and Lakshmi General Finance Ltd, have decided to merge.

The boards of both the companies have taken a decision to this effect, Sundaram Finance has said in a press release.

Sundaram Finance has an 18 per cent stake in Lakshmi General Finance. LGF has less than 3 per cent in Sundaram Finance. While Sundaram Finance is a listed company, the other is not.

Today, Sundaram Finance has a net worth of Rs 523 crore and financial assets of Rs 3,200 crore. Lakshmi General Finance has a net worth of Rs 116 crore and financial assets of Rs 700 crore.

While both companies are predominantly into commercial vehicle financing, Lakshmi General Finance's customers are mostly small and medium sized, and its operations are mostly in South India.

The merger of the two companies of the same group has been on the cards for quite a few years now.

According to Mr T.T. Srinivasa Raghavan, Managing Director, Sundaram Finance, the proposal had been "talked about and reviewed" for some time, and has achieved fruition now, "keeping with the tone and tenor of the time."

He said that both companies had very few common customers.

He also pointed out that both were triple-A-rated companies.

Senior company officials said that the modalities of the merger are yet to be decided upon, for which a committee had been formed.

They, however, said that the process of merger would be over this financial year. The merger is to take effect from April 1, 2004.

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