SREI Infrastructure & BNP Paribas Lease Group form 50:50 Joint Venture

SREI Infrastructure Finance Ltd has announced that the Company and BNP PARIBAS LEASE GROUP ("BPLG"), the leasing arm of BNP Paribas, have reached an agreement regarding a strategic partnership in equipment finance in India.

The partners will bring their respective expertise and know-how as well as combine the strength of the Company brand and the local expertise of the Company with the specialized equipment finance skills and global brand strength of BPLG, in order to further develop the equipment finance business.

Mr. Hemant Kanoria, Vice Chairman and Managing Director of the Company, termed this joint venture as a very significant step in the Indian Financial Services Market. "We are the largest player in the financing of infrastructure equipment and collaborating with BPLG will help in increasing our market share further and also expanding the product line into financing of agriculture, information technology, medical and other equipment."

Subject to necessary regulatory approvals and statutory consultation, the alliance will involve a new Joint Venture Company, equally owned by each of the Company and BPLG. The current infrastructure equipment (asset finance) business of the Company along with its insurance broking activity will be transferred to this JV.

The Company is a Non Banking Financial Institution, with special focus on the infrastructure sector since 1989. Pursuant to the transaction, the Company 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. Indeed, the Joint Venture that is being formed with an initial networth of Rs 800 Crores would not only strengthen its ability to grow its 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. Moreover, the partnership with BPLG should help the Joint Venture 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.

BNP Paribas Lease Group (BPLG) is a 100% BNP Paribas subsidiary specialized in financing investments made by Companies and professionals, either through the intermediary of its partners (manufacturers, importers and vendors of equipment) or directly to the customers. BNP Paribas Lease Group has been in this business for 50 years and is today the European and French market leader with a global balance sheet of 15 billion Euros.

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

Source : Equity Bulls

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