The Hindu Business Line : GE Capital, Shriram Transport join hands

Chennai, March 18 GE Transportation Financial Services, a unit of GE Capital India, has signed a Memorandum of Understanding with Shriram Transport Finance Company to form a joint venture that will finance purchase of equipment of any kind, such as construction, medical or industrial.

But given that GE Capital is in trouble in the US and is looking for cash, the question is whether the partners will operationalise the joint venture or not. Mr Vicky Bindra, President and Chief Executive of its financial services business in India, did not respond to Business Line’s queries, either on GE wanting to rollback its financial services in India, or on the joint venture with Shriram.

However, the existence of the recently-signed MoU has been confirmed by sources in GE. Shriram Transportation Finance’s Managing Director, Mr R. Sridhar too, said he did not want to comment.

It is learnt that according to the MoU, Shriram would take 80 per cent stake in the proposed venture. Shriram would bring in cash, while GE would throw the weight of its reputation and expertise behind ‘Shriram Equipment Finance Ltd’.

The way forward for the joint venture would completely depend upon how GE intends to “re-focus” its financial services businesses in India.

Meanwhile, Shriram Transport is also said to be interested in buying GE Transportation Financial Services’ Rs 1,800-crore loan portfolio.

Several rounds of discussions have taken place, but the issue is stuck at the point of pricing.

Asked about this, Mr Sridhar observed that for Shriram Transport Finance Company, acquiring portfolio is a matter of routine and the company is always in talks with other financiers for doing a securitisation deal.

Shriram had also earlier evinced interest in picking up Citicorp Financial’s portfolio, worth about Rs 4,000 crore. Again, lack of meeting of minds on pricing was the problem.

More Stories on : Alliances & Joint Ventures | NBFCs

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
JBIC extends $100-m export credit line for ICICI Bank

Rupee gains 20 paise

Indian holdings in US treasuries soar to $32.5 b

NRIs shifting funds from dollar to rupee accounts

Crane tool for L&T arm

Dhanalakshmi Bank raises the bar

Axis Bank to curtail personal loan portfolio

UK fund offloads holding in Vijaya Bank

HSBC leveraging Investsmart network to grow retail portfolio

Bond prices up

Arcil seeks change in FDI norms to raise funds

Trade finance getting dearer

Kerala banks do well under economic stimulus package

Call rate ends a tad higher

GE Capital, Shriram Transport join hands

Bullish on growth