ChrysCap to get equal pie in 3 Shriram firms

Private equity fund ChrysCapital and the promoters of Shriram group will end up with equal stakes in three group companies"" Shriram Investments, Shriram Transport Finance and Shriram Overseas - following the open offer.

R Thyagarajan, chairman of Shriram group, said ChrysCapital has picked up over 20 per cent stake in the three companies and is expected to garner another five per cent through open offers.

"It is unlike that many shareholders will participate in the open offers as the offer prices are lower than the ruling market rates, except for Shriram Overseas," he said.

The offer price for Shriram Transport Finance, for example, is Rs 35 against the ruling market rate of Rs 60. The offer of Shriram Transport Finance will open on April 18 and will close on May 17.

The private equity fund will take active participation in management of the companies by sending two representatives. The promoters hold nearly 25 per cent stake in the companies.

Thyagarajan said the foreign fund's participation on the board of the companies will be finalised at next board meeting of the group in June.

"We don't want to a large board. I think that the Shriram group may withdraw two of its representatives to make room for nominees of ChrysCapital," he added.

The Shriram group is undertaking a massive restructuring to bring all truck financing companies"" Shriram Investments, Shriram Transport Finance and Shriram Overseas"" under one umbrella and phase out the truck financing business of Shriram City Union.

The merger of Shriram Investments and Shriram Transport Finance is expected to be done by next year and the merged entity will bring Shriram Overseas under its fold in 2007.

The merger entity is expected to be rechristened either as Shriram Investments or Shriram Transport Company. The truck finance business of the group manages funds of Rs 5,000 crore and is growing by 30 per per annum.

Shriram City Union will focus on consumer finance business. The chit funds of the group in Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra will become subsidiaries of it so that it could use their marketing network. The chit funds have a combined network of 400 branches and 20 lakh customers.