SREI, BPLG to set up JV

Mumbai, May 31 (UNI) SREI Infrastructure Finance Ltd, a non banking financial institution, here today signed a joint agreement with an European company BNP Paribas Lease Group (BPLG) for a strategic partnership in equipment finance in India.

The duo will set up a joint venture (JV) company in India with initial networth of Rs 800 crore on equally owned basis. BPLG will invest Rs 725 crore in the JV company and the rest will be managed by SREI along with its assets in accordance to the requirement.

Speaking to the media here today, SREI Vice Chairman and MD Hemant Kanoria said that the joint venture company will be equally owned and managed by both the partners. The current infrastructure equipment, asset finance, business of SREI along with its insurance broking activity will be transferred to the newly formed JV company.

With this venture SREI proposes to focus on infrastructure project finance, fund management, investments, advisory and development business including the equipment bank, Quipo. This transaction should help the company in enhancing shareholder value and also address the continuous need for capital.

Moreover, the company will not only strengthen its ability to grow business manifold but also free the net worth of the company associated with the transferred business and thus increasing its ability to grow its other businesses.

''The partnership will increase our market share further and also expanding the product line into financing of agriculture, information technology, medical and other equipments as well,'' said Mr Kanoria.

The partnership with BPLG should help the JV company in lowering its cost of funds for the asset finance business as well as in strengthening its core activities and its position in the sector, he added further.

The Company had Kotak Investment Banking as their exclusive financial advisor while BPLG has been exclusively advised by Ambit Corporate Finance.

UNI