Shriram Transport Finance Corporation (STFC) said on Monday that the company is re-looking at the merger plans with Shriram City Union Finance adding that it may not necessarily be a three-way merger as planned initially.
“We are still looking at it. We were looking at whether we have a synergy benefit. If we have a synergy benefit, we will definitely look at it,” Umesh Revankar, managing director and chief executive officer of Shriram Transport Finance, told Business Standard.
The initial plan was to have a three-way merger in which, unlisted Shriram Capital, which has billionaire Ajay Piramal and private equity firm TPG Capital as investors listed STFC and Shriram City Union Finance, were supposed to be involved. “Last two years, we were facing the pandemic, and prior to that the IL&FS issue. Hence, we did not really discuss it much,” he added.
Revankar added that the plan is yet to be discussed before the board. “First we have to get the board’s approval. Nothing is finalised. It may not be a three-way merger,” Revankar said. STFC is mainly into vehicle finance, specialising in funding second-hand trucks, while Shriram City Union is into consumer finance.
R. Thyagarajan, the founder of Shriram Capital Group, had earlier said that such a move will help the non-bank financier boost its lending and insurance businesses. In February 2021, Revankar told Business Standard that the group would like the insurance business to remain independent and hence not focusing on the three-way merger.
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