BNP to swap joint venture stake for 5% in Srei Infra
Aleasing unit of BNP Paribas SA will pick up a 5% stake in Srei Infrastructure Finance Ltd in lieu of the French lender’s stake in an equal joint venture with the local financier.
BNP Paribas Lease Group will swap its 50% stake in Srei Equipment Finance Ltd, seven years after it first invested in the company, for the 5% stake in parent Srei Infrastructure. The 5% stake is worth around Rs.150 crore at current market value. That is much less than what BNP had initially invested in Srei Equipment.
In 2008, BNP Paribas had paid Rs.775 crore to acquire a 50% stake in the equipment finance joint venture, according to a spokesperson for the Srei group. It had invested at least an additional Rs.150 crore to shore up the joint venture’s net worth.
The swap creates an opportunity for the BNP Paribas group “to tap into the growth of the infrastructure sector in India in a broader way”, a spokesperson for the French bank said in an emailed statement.
Shares of Srei Infrastructure surged 13.35% to close at Rs.58.60 on the BSE on Tuesday, while the stock exchange’s benchmark Sensex gained 0.17% to close at 26,079.48 points.
The equipment finance business was carved out of the infrastructure business into a separate company in 2008. Srei Equipment will become a wholly owned subsidiary of the group’s larger infrastructure finance business, the Srei group said in a statement.
Srei Equipment Finance claims to be the biggest financier of construction and mining equipment in India.
Read full article: Live Mint
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