Financial Daily from THE HINDU group of publications
Thursday, May 16, 2002
Financial Daily from THE HINDU group of publications Thursday, May 16, 2002 |
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Money & Banking
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NBFCs Corporate - Mergers & Acquisitions Citicorp Finance to take stake in 2 Shriram cos Our Bureau
Mr Jean-Paul Votron (left), Group Executive, Citibank, and Mr Nanoo G. Pamnani, CEO (India), Citibank, at a press conference in Chennai on Wednesday.
CHENNAI, May 15 CITICORP Finance India Ltd will pick up equity stakes in two companies of the Chennai-based Shriram group, it was announced at the stock exchanges onWednesday. Shriram group officials told Business Line that Citicorp, the non-banking finance arm of Citibank, would pick up 19.9 per cent in Shriram Transport Finance Company and Shriram Investments Ltd. Citicorp is expected to spend around Rs 18 crore for the stakes, which money would be more or less equally divided between the two companies, sources said. The shares are to be allotted to Citicorp on a preferential basis, the stock exchanges were told. Sources also said that the Shriram group was planning to come out with a rights issue in both these companies, sometime towards the end of the year. The details of the issue are being worked out, but it is expected that Citicorp being a part of the companies would lend strength to the rights issue. At a press conference here, Citibank's Chief Executive Officer-India, Mr Nanoo Pamnani, said that "alliances are a way of life" at the bank. Sources in the Shriram group observed that with the infusion of the money from Citicorp, both Shriram Transport and Shriram Investment would be enabled to raise further funds from the market. The group expects to arm itself with about Rs 100 crore in all. Citicorp picking a stake in the two Shriram companies takes further a relationship that has been built over the last about two and a half years. Citicorp had earlier named Shriram Transport as a "channel partner". Under the arrangement, Shriram Transport (like a clutch of other companies under a similar pact with Citicorp) generated truck loans, which Citicorp financed. That is how Citicorp Finance India has become "the largest truck financier in the country".
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