Shriram group hits the restructure button

Chennai: In line with the group restructuring plans, the city-based non banking finance group Shriram has announced the merger of Shriram Investments Limited with Shriram Transport Finance Company Limited subject to the approval of the Madras High Court. A share exchange ratio of 1:1 has been approved by the board of two companies based on the valuation made by Ernst & Young.

According to Shriram group chairman R Thyagarajan, the merger will result in the creation of largest non banking finance company in the domestic truck financing industry. Last year the two companies disbursed around Rs6,000 crore.

"The combined entity will enjoy a stronger synergy of financial resources, managerial and marketing expertise that will enhance value for all our investors and stakeholders."

Meanwhile, for the first quarter ended June 30,2005 Shriram Transport has declared a revenue of Rs92.13 crore as against Rs71.98 crore for the corresponding period previous year. The profits also rose to Rs12.96 crore as against Rs10.09 crores recorded in the corresponding quarter of the previous year.

Similarly, the Shriram Investments too posted higher revenue of Rs85.67 crore for the quarter ended June 30, 2005 as against Rs74.30 crores for the corresponding quarter in the previous year. The net profit of the company also jumped from Rs9.56 crore to Rs12.86 crores.