By Azhar Razak
In the process of proposed consolidation of the financial sector, several banking analysts last week said that they feared there might be more a case of ‘gunshot weddings’ than properly ‘arranged marriages’ as many companies will not be willing to come into agreements over valuations. The Central Bank (CB) on the other hand has indicated that companies which fail to identify merger partners themselves during a stipulated timeline faced the risk of a ‘forced marriage’ by the CB or will have to forego their respective banking/finance licenses.
Meanwhile, Managing Partner of KPMG in Sri Lanka, Reyaz Mihular told The Nation Gain last week that the nine member panel of audit firms who were tasked with the responsibility of conducting a due diligence exercise on 38 Non Bank Finance Institutions (NBFIs) have submitted their business valuation reports to the Central Bank of Sri Lanka by the deadline of March 31, 2014.
Accordingly, it is learnt the CB will make the document available free of charge to interested buyers amongst the Category B companies (Banks and 19 large finance companies) following the signage of a non-disclosure agreement from next week onwards.
“A majority of FHASL member firms have submitted their broad plans for mergers/absorptions to the Central Bank by the deadline. We now look forward to study the valuation reports that will be made available to us,” President of The Finance House Association of Sri Lanka (FHASL) and Director/CEO of Softlogic Finance PLC Nalin Wijekoon said.
However, he acknowledged that he does not have information on the count of how many companies out of the FHASL member firms who had submitted their proposals for mergers/absorptions.
Meanwhile, the CB which issued an update on Monday said that over the past few days, in keeping with the Central Bank’s request, banks and NBFIs have commenced submitting their broad plans on consolidation and greater participation in the economic activities, thereby adhering to the already announced time line of March 31, 2014. They noted that these plans are to be reviewed by the Central Bank within the coming week and suitable responses due to be sent thereafter.
“Several banks and finance and leasing companies (NBFIs) have shortlisted potential merger/acquisition counterparts and are carrying out internal evaluations on such companies,” the Central Bank added though stopping short of specifying the number of companies who had shortlisted potential partners.
The statement further noted that the Central Bank has also approved in principle, certain possible consolidation activities amongst a few banks and finance companies.
“In the meantime, several strategic investors have indicated their willingness to infuse fresh capital to some of the banks and NBFIs, and such investments are expected to strengthen the balance sheets of those entities while enabling them to expand their business operations. The Central Bank has also granted approval in principle, for such strategic investments,” the statement further mentioned.
http://www.nation.lk
In the process of proposed consolidation of the financial sector, several banking analysts last week said that they feared there might be more a case of ‘gunshot weddings’ than properly ‘arranged marriages’ as many companies will not be willing to come into agreements over valuations. The Central Bank (CB) on the other hand has indicated that companies which fail to identify merger partners themselves during a stipulated timeline faced the risk of a ‘forced marriage’ by the CB or will have to forego their respective banking/finance licenses.
Meanwhile, Managing Partner of KPMG in Sri Lanka, Reyaz Mihular told The Nation Gain last week that the nine member panel of audit firms who were tasked with the responsibility of conducting a due diligence exercise on 38 Non Bank Finance Institutions (NBFIs) have submitted their business valuation reports to the Central Bank of Sri Lanka by the deadline of March 31, 2014.
Accordingly, it is learnt the CB will make the document available free of charge to interested buyers amongst the Category B companies (Banks and 19 large finance companies) following the signage of a non-disclosure agreement from next week onwards.
“A majority of FHASL member firms have submitted their broad plans for mergers/absorptions to the Central Bank by the deadline. We now look forward to study the valuation reports that will be made available to us,” President of The Finance House Association of Sri Lanka (FHASL) and Director/CEO of Softlogic Finance PLC Nalin Wijekoon said.
However, he acknowledged that he does not have information on the count of how many companies out of the FHASL member firms who had submitted their proposals for mergers/absorptions.
Meanwhile, the CB which issued an update on Monday said that over the past few days, in keeping with the Central Bank’s request, banks and NBFIs have commenced submitting their broad plans on consolidation and greater participation in the economic activities, thereby adhering to the already announced time line of March 31, 2014. They noted that these plans are to be reviewed by the Central Bank within the coming week and suitable responses due to be sent thereafter.
“Several banks and finance and leasing companies (NBFIs) have shortlisted potential merger/acquisition counterparts and are carrying out internal evaluations on such companies,” the Central Bank added though stopping short of specifying the number of companies who had shortlisted potential partners.
The statement further noted that the Central Bank has also approved in principle, certain possible consolidation activities amongst a few banks and finance companies.
“In the meantime, several strategic investors have indicated their willingness to infuse fresh capital to some of the banks and NBFIs, and such investments are expected to strengthen the balance sheets of those entities while enabling them to expand their business operations. The Central Bank has also granted approval in principle, for such strategic investments,” the statement further mentioned.
http://www.nation.lk
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