INSUBCONTINENT EXCLUSIVE:
MUMBAI: Shriram Transport Finance shares fell 12 per cent amid concerns of a potential loss after it disclosed an off-balance sheet exposure
of Rs 870 crore to a group company.
Shares of the company fell around 20 per cent in the early trade
However, it recovered closing 11.83 per cent down to Rs 1,144.85 on the Bombay Stock Exchange after the management assured that the group
In 2015, the truck financier provided guarantees to non-convertible debentures of Rs 870 crore issued by Shriram Ventures Llimited, an
unlisted holding co of non-financial businesses of the Shriram Group.
SVL had issued Rs 650 crore of zero coupon NCDs in June 2015 at 11.25
accounting norms- IndAS reporting, the company will have to take expected losses to the tune of Rs 500 - 550 crore
Rating company Icra had downgraded SVL last year
Creditors have taken Shriram EPC to National Company Law Tribunal as it failed to repay instalments
In June 2018, National Company Law Appellate Tribunal had stayed the corporate insolvency resolution process proceedings against the
report said that cash flows at SVL and subsidiaries may be inadequate to service the NCD, but other companies within Shriram group may
potentially refinance or aid in repayment
Once SVL honours the debt obligation, Shriram would have to write it back in the net worth and only in case of SVL not honouring will lead
There are two companies- Shriram Capital and Shriram Ventures Limited.
