Shriram Transport ends NCD guarantee to arm

Transport Finance is off the hook for providing a corporate guarantee on Rs 650 crore worth of non-convertible debentures to Shriram Ventures, which analysts expected the company will have to provide for eventually.

In a filing with stock exchanges, Shriram Transport said the corporate guarantee has been terminated with immediate effect. Consequently, the contingent liability of the company with respect to redemption or maturity of the NCDs stands terminated, it said.

“We had given guarantee on the NCD which was to mature in June and now the promoter group has taken over the NCD,” managing director Umesh Revankar said. “Investors have no liabilities.”


It had given a corporate guarantee to help Shriram Ventures enhance its rating.

“We did not provide for the guarantee because we were sure that the promoter group will take it over,” said Revankar. “The promoter took over the NCD as it had said. If SVL is not able to service the NCD at maturity, the promoter will pay it.”

A borrower had taken Shriram Ventures to the Chennai bench of the National Company Law Tribunal over a payment dispute. The Shriram Group has since made a settlement with the borrower. The case is now removed from the NCLT.