Shriram Group announces the merger of three financial companies
In a composite scheme of arrangement and merger, the two non-bank financial companies (NBFCs) of the Shriram Group – Shriram City Union Finance Ltd and Shriram Capital Ltd (unlisted) – will merge with another listed company Shriram Transport Finance Ltd, a said the group. .
Subsequently, Shriram Transport will be called Shriram Finance Ltd.
After the merger, Shriram Transport/Shriram Finance would have a combined assets under management (AUM) of over Rs 1,50,000 crore, over two crore customers served till date and a distribution network of over 3,500. All of these would be serviced by a team of over 50,000 employees.
At their meeting on Monday, the boards of three companies announced a major reshuffle aimed at creating a financial powerhouse and becoming the country’s largest NBFC retail bank.
The merger is subject to the approval of the shareholders of the three companies and regulatory authorities such as the Reserve Bank of India (RBI), the Competition Commission of India (CCI), the Insurance Regulatory and Development Authority of India (IRDAI) , the National Housing Bank, the National Company Law Tribunal (NCLT) and others.
Regarding the share exchange ratio, Shriram Transport – which will be called Shriram Finance – will issue 1.55 shares for each share of Shriram City Union Finance and 0.09783305 shares for each share of Shriram Capital.
This translates into the fact that the shareholders of Shriram Capital will receive one share of Shriram Transport for each share held.
In addition, shareholders of Shriram Capital will receive 1.55 shares of Shriram Transport for each share of Shriram City Union held by the former.
According to the statement issued by Shriram Group, AUmesh Revankar, Executive Vice President and CEO of Shriram Transport, would be the Vice President of the merged entity.
YS Chakravarti, the managing director and CEO of Shriram City Union, would be the managing director and CEO of the merged entity.
Shriram Transport’s board has also approved the appointment of Parag Sharma, Chief Financial Officer, as a full-time director on the board.
PwC will help Shriram Transport and Shriram City Union navigate the post-merger integration process, the group said.
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