The shareholders and creditors of Shriram Transport Finance Company (STFC) have approved the proposal of amalgamation of Shriram City Union Finance (SCUF) and Shriram Capital with the company and the entire merger process may complete in the next two-three months, STFC Vice Chairman and Managing Director (MD) Umesh Revankar told Moneycontrol on July 6.
“Today (July 6) we have Shriram City Union Finance (SCUF) shareholders and creditors meeting and the total process of merger may take around 2-3 months from now to complete,” he said.
In an exchange filing today, STFC said that as per the consolidated shareholder voting results, 98.1 percent of votes were cast in favour of the resolution while 1.9 percent of shareholders voted against the resolution.
“Accordingly…the proposed resolution approving the Composite Scheme of Arrangement and Amalgamation has been approved by a majority of the Equity Shareholders representing three-fourths in value cast votes in the favour of the scheme…Thus, the aforesaid Resolution was passed with the requisite majority as required under the Act and SEBI Circular,” said the scrutiniser appointed by National Company Law Tribunal (NCLT) in their review report.
Further, 99% of the secured and unsecured creditors voted in favour of the deal during the NCLT-called meeting on July 4, as per two separate exchange notices by STFC.
Shriram Group's board had on December 13 approved the long anticipated merger of its lending subsidiaries Shriram Capital (SCL) and SCUF with STFC, pending regulatory and shareholders’ approval. The merged entity would be known as Shriram Finance.
While approvals from the Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI) have been received, the approvals from the Competition Commission of India (CCI) and Insurance Regulatory and Development Authority (IRDAI) are still pending and should not face any issue in coming through, SCUF MD & Chief Executive Officer (CEO) YS Chakravarti told Moneycontrol on June 22.
From July 1 onwards, over 500 branches of STFC and SCUF will cross-sell each other’s loans, deposits, and other products in a bid to increase synergies between the branches before the completion of the merger, he said. Within two months, the 500 branches are likely to generate leads of up to Rs 400 crore of loans, he added.
“We are comfortable with the numbers achieved so far. From July 1 onwards, we will expand the pilot project to a minimum of 500 branches so by the time NCLT (National Company Law Tribunal) approval is achieved (for merger)…our internal platform should be integrated, and branches should be also ready to sell all the products,” Chakravarti said.
Further, the Shriram Group is parallelly working on creating a super app that will soon offer loan, deposit, mutual funds, insurance, and payment services, Chakravarti said.
The group will also launch a supply chain financing product by July-end and come up with a personal loan product for prime customers by end of the current financial year.
“We have earmarked Rs 200 crore for us to understand the product (supply chain finance)…so we will evaluate the performance at Rs 200 crore of loans and basis our experience scale it up,” Chakravarti said.
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