Srei Infrastructure Finance (SIFL) on Friday signed a formal non-cash deal with BNP Paribas wherein by virtue of a share swap deal BNP Paribas acquired 5 per cent stake in SIFL in lieu of 50 per cent stake in their equal joint venture Srei Equipment Finance (SEFL).

This deal would mark the exit of BNP Paribas from SEFL, which would become a wholly-owned subsidiary of SIFL. The transaction would make a minority partner in the listed SIFL.

Sunil Kanoria, Vice-Chairman of SIFL, told reporters that there would no change in the paid-up capital of SIFL since BNP Paribas would be owner of treasury shares kept in a trust by SIFL. Earlier in April 2010, treasury shares worth 9.6 per cent stake in SIFL had originated because of merger of Quipo Infrastructure Equipment with SIFL. After the deal, SIFL’s balance sheet would still carry the trustee-held treasury shares representing 4.6 per cent of the paid-up capital of the company.

The present deal would also lead to SIFL’s consolidated networth becoming ₹4,800 crore.

Room for leveraging

According to Kanoria, the deal improves the balance sheet of SIFL and leaves enough room for leveraging. “At the current price of ₹65 a share of SIFL, the 4.6 per cent (representing treasury share) stake would be valued at ₹150 crore. Last fiscal, SIFL utilised the Viom stake sale proceeds of ₹2,931 crore to reduce debt,” he added.

On Friday, SIFL shares closed 7.69 per cent up at ₹65.15 on the BSE at ₹65.15.

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