MUMBAI, May 1: The US-based General Electric Capital Corporation (GE Caps) appears to have dropped its plans to acquire a 100 per cent stake in SRF Finance. Instead, four of its subsidiaries have made an open offer for picking up 34.47 per cent in the SRF group firm.

The offer, made on Thursday, is for buying out 6,985,925 shares of the company at a price of Rs 53.50 per share, amounting to Rs 38 crore.

The move comes close on the heels of an earlier memorandum of understanding that had been entered into by GE Capital, which envisaged picking up a 50.25 per cent stake from SRF group companies in SRF Finance.

Subsequently, GE Capital (Mauritius) Investment Company made a public offer on January 28 where it said that it would buy out an additional 20 per cent of the public holding in the company.

Though reports have suggested that GE Caps is keen on picking up the entire 100 per cent stake in SRF Finance, the public offer made by GE Capital (Mauritius) Ltd on Thursday suggests otherwise.

"The acquirer and the companies acting in concert hereby make an offer to acquire an aggregate of 6,985,925 shares of SRF Finance representing 34.475 per cent of the equity capital of the company at a price of Rs 53.50 per fully paid-up equity share to be paid in cash. In case of the partly paid-up shares, the offer price of Rs 53.50 per share will be reduced by the unpaid portion," states the public offer issued by Kotak Mahindra Capital Company, the manager to the public offer.

While GE Capital (Mauritius) Ltd will be the acquirer, three GE group subsidiaries, GE Capital Services India, GE Capital Financial Services and GE Capital International Services, all based in New Delhi, will be the companies acting in concert in the offer bid.

While 20,243,600 equity shares of SRF Finance are fully paid-up, 20,140 equity shares are partly paid-up and another 4,052,750 shares are subject to lock-in up to February 13, 1998.

The open offer states that the acquirer and the companies acting in concert or any of the GE Capital companies do not currently hold any equity shares in SRF Finance.

This means that GE Caps is yet to pick up the 50.25 per cent holding of SRF group companies in SRF Finance.

GE Capital Corporation, the parent of the four group companies making the current offer, has confirmed the availability of funds and has made financial resources of Rs 37.37 crore available for funding the proposed open offer.

The offer is being made to all shareholders of SRF Finance whose names appeared in the register of members on March 14, which has been fixed as the specified date.

The letter of offer will be despatched to these shareholders on or before May 3. The offer will open on May 12 and close on June 10.

"The acquirer has made an application to the Foreign Investment Promotion Board (FIPB) to acquire the equity shares of SRF Finance, and the approval is awaited. After receiving the go-ahead, the acquirer will make an application to the Reserve Bank of India to acquire the equity shares of SRF Finance and make payment. The acquirer and the companies acting in concert do not require any other approval," the open offer says.

SRF Finance, on its part, will require the approval of certain lenders, including IFCI, State Bank of India, State Bank of Patiala, State Bank of Bikaner and Jaipur, and State Bank of Hyderabad for a change in management and acquisition of shares of the company.

"While IFCI has already given the go-ahead, approvals from other banks is awaited," the offer says.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.