CHENNAI: AIG Capital India Private Ltd., a wholly owned subsidiary of AIG Capital Corporation of the U.S., has inked an agreement to pick up 75 per cent equity stake in the city based unlisted non-banking finance company, Vivek Hire Purchase and Leasing Ltd. (VHPL), for an undisclosed sum. AIG will acquire these shares from the existing promoters.

The promoters of Vivek Ltd., one of the largest consumer durables retailers in the country, are the current owners of VHPL.

For the American International Group, a leading name in the field of insurance and financial services, VHPL is the first buy in the consumer finance category.

B. A. Srinivasa Setty, a founder director of VHPL, told The Hindu that the promoters had decided to sell majority stake in VHPL so as to focus on the core retail business. When they hived off the hire purchase business of Vivek Ltd. into an independent company in the early Nineties, there was a sound logic for doing that. ``Consumer finance was hard to come by those days,'' he said. Post-liberalisation, the scene had changed dramatically and many had since entered the field. The changed context had led the promoters to offload majority shares in the non-banking finance company. VHPL provided finance to consumer durables bought from Vivek outlets only, he pointed out. According to him, VHPL had an asset base of around Rs. 12-13 crore. It had been doing a business of Rs. 25 crore a year, he added.

Along with the share sale agreement, VHPL and Vivek Ltd. have signed a retailer co-operation agreement.

Sunil Mehta, Country Head and CEO, AIG India, told this correspondent that the acquisition of VHPL would provide AIG a good platform to enter the consumer durables finance field. "It (Vivek) is a very good name. It is well respected in the Southern part of India," he said. Mr. Mehta said VHPL under a new management could broadbase its product offerings by getting into areas such as automobile, personal and home finance. AIG Group had an NBFC registration with the Reserve Bank of India.

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