Srei Infra board okays merger with Quippo .............

Srei Infra board okays merger with Quippo

RITWIK MUKHERJEE
Kolkata



THE BOARD of Srei Infrastructure Finance on Thursday approved amalgamation of Quippo Infrastructure Equipment Limited (Quippo) into Srei, as recommended by a group of independent advisors. The company plans to leverage the combined networth of over Rs 2,000 crore for higher capitalisation. Srei was holding close to 17 per cent in Quippo.



The Srei board also decided to capitalise some of its reserve as a part of the amalgamation scheme. It will to issue bonus shares at a ratio of 4:5. This is expected to enhance shareholder value further. The date of the merger has been fixed to be April 1, 2010 while the process will be complete by Q2, 2011-12.


The Srei board, following detailed deliberations, approved the swap ratio of three equity shares of Rs 10 each for every two equity shares of Rs 10 each.


Disclosing this at a press conference, Hemant Kanoria, chairman and managing director of Srei, said, "With the unprecedented growth that we are witnessing in the infrastructure sector we feel that this step to synergistically integrate all businesses of Srei and Quippo will enable us to grow faster and create a large infrastructure asset base. Our third quarter results have also shown a remarkable improvement, which will take a leapfrog if we augment our networth.


The bonus issue at this crucial juncture which I would call a take-off stage in infrastructure for the company would result in creating sufficient capital base to grow continuously."


My Take:
I am extremly bullish on Srei Infra from now onwards.Merging Quippo Infra is one of the reason but there are other valid reasons too.....I would like to find them out by my readers.....