Ge Cap Buys Out Srf Finance

SRF Ltd has divested its entire 50.5-per cent stake in an associate company, SRF Finance (SRFF), in favour of GE Capital at a price of Rs 53.5 per share.

GE Capital Mauritius, which bought out the stake, will be paying SRF Ltd Rs 54.77 crore for the deal. GE Capital Mauritius is a subsidiary of GE Capital of the USA, the worlds largest finance company.

The deal is subject to approvals from the Foreign Investment Promotion Board (FIPB), the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi).

Announcing the deal yesterday, GE Capital Mauritius said that it will make an open offer for another 20 per cent of SRFFs equity at the same price of Rs 53.5 per share. The cost of the public offer will be Rs 21.6 crore.

 

According to the company, the offer will be made to those equity holders whose names figure in the members register on March 14. The letter of offer will be mailed by March 24. Kotak Mahindra Capital Company has been appointed the lead managers to the issue.

The agreement was finalised in London by four SRFF promoters - SRF Promenade Holdings Ltd, SRF Calgary Holdings Ltd, SRF Superior Holdings Ltd, SRF Transnational Holdings Ltd and their associates.

The total number of shares changing hands is 10,238,431. The lock-in period till February 13, 1998 of these shares will continue.

Addressing a press conference in New Delhi yesterday, vice-chairman and senior managing director of SRF Ltd, Arun Bharat Ram, said: Together with the GE deal, this will generate nearly Rs 150 crore which will be utilised to retire a part of the companys Rs 600-crore debt burden.

SRF Ltd is also planning to raise further equity by way of a rights issue and a private placement of equity shares. The rights issue and private placement of equity shares is expected to bring in Rs 100 crore.