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Our Bureau

$ 100-m deal through last week

Chennai , Sept. 11

Shriram Transport Finance Ltd has sold off truck loans worth $100 million (Rs 450 crore) to DSP Merrill Lynch Capital Ltd. The transaction has been completed and the company received the money on September 7.

In the next quarter, DSP Merrill Lynch will buy another bunch of loans worth $100 million from Shriram Transport.

At a press conference here on Monday, Mr R. Sridhar, Managing Director, Shriram Transport Finance Company Ltd, and Mr Rajiv Garg, Head - Global Asset Based Finance, Securitisation & Principal Investments, DSP Merrill Lynch Ltd, said that the partnership between the two companies would continue into the coming years.

Shriram Transport is the largest truck finance company in India, with assets under management of Rs 8,000 crore. Of this, the group has assets of about Rs 6,000 crore in its books; the other Rs 2,000 crore represents assets originated by the company and sold off to other parties but continue to be managed by the company.

Answering a question, Mr Garg said that the deal was without recourse, that is, the risk of defaults would be borne by DSP Merrill Lynch.

Mr R. Thyagarajan, Chairman of Shriram group, said that the demand for funds for purchase of trucks, new and used, was about Rs 70,000 crore a year. Availability of finance at reasonable prices would enable owners of vintage trucks to scrap their vehicles and go in for vehicles of lesser age. Efficiency of the entire trucking industry would improve, Mr Thyagarajan noted.

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