| Commercial Credit & Finance PLC has acquired the control of Trade Finance & Investment PLC, a company controlled by the Cooray family, owners of Jetwing Group. Several blocks of Trade Finance shares traded in the morning hours, each share at Rs.28. The Cooray family owned over 75 stake of the company as of the March, 2014 interim financial accounts of the company. The net asset per share of Trade Finance stood at Rs.13.94. The asset base was Rs.1.6 billion. It is believed that the two largest private banks, Commercial Bank PLC and Hatton National Bank PLC were also interested in acquiring the control of Trade Finance. Incorporated in 1978, Trade Finance was listed in the Colombo Stock Exchange in 2011. www.dailymirror.lk |
Monday, 4 August 2014
Commercial Credit acquires Trade Finance & Investments
Sri Lankan stocks near 3-yr closing high on large cap buying
Aug 4 (Reuters) - Sri Lankan stocks hit a near three-year closing high on Monday, led by large cap shares, on expectation of strong corporate earnings and interest rates further falling, even as continued buying by foreign investors propelled a shift into risky assets.
The main stock index ended 0.18 percent, or 12.02 points, firmer at 6,822.15, its highest close since September 20, 2011. It rose 6.82 percent in July and is up 15.21 percent so far this year.
Hopes over strong corporate earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $21.93 billion-worth stock market.
Turnover was 2.29 billion rupees ($17.59 million), more than double this year's daily average of about 1.09 billion rupees.
Foreign investors were net buyers of 32.8 million rupees worth of shares on Monday, extending the year to date net foreign inflow to 10.93 billion rupees.
The index has been in the overbought region since July 3, as local investors moved funds from fixed income to riskier assets because of low interest rates and foreign buying.
Gains were led by large-cap share Ceylon Tobacco Company Plc which rose 1.64 percent to 1,149.10 rupees. Top conglomerate John Keells Holdings Plc rose 0.64 percent to 237 rupees.
The Ceylon Tobacco Company reported a 11 percent fall in its June quarterly earnings after market hours.
Trade Finance & Investments Plc which accounted for 67.4 percent of the day's turnover rose 2.94 percent to 28 rupees. The company, in a disclosure, said five of its shareholders sold 75.43 percent stake to Commercial Credit and Finance Plc at 28 rupees a share.
Shares in Commercial Credit and Finance rose 1.6 percent to 25.40 rupees.
Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, analysts said. Yields on treasury bills edged down further by 7-10 basis points at a weekly auction on Wednesday.
The International Monetary Fund urged Sri Lanka on Wednesday to keep key interest rates on hold for the near term and said a cautious approach is warranted.
($1 = 130.2000 Sri Lankan Rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)
Sri Lanka stocks close up 0.2-pct
Aug 04, 2014 (LBO) - Sri Lanka's stocks closed 0.18 percent higher with Ceylon Tobacco Company gaining amid strong domestic participation, brokers said.
The Colombo benchmark All Share Price Index closed 12.02 points higher at 6,822.15, up 0.18 percent. The S&P SL20 closed 0.91 points higher at 3,760.33, up 0.02 percent.
Turnover was 2.29 billion rupees, up from 775.04 million rupees last Friday with 98 stocks closed positive against 95 negative.
Trade Finance and Investments closed 80 cents higher at 28.00 rupees with four massive off-market transactions of 1.18 billion rupees changing hands at 28.00 rupees per share contributing 52 percent of the daily turnover.
The aggregate value of all off-the-floor deals represented 62 percent of the turnover.
Central Investments and Finance closed 30 cents higher at 2.00 rupees, attracting most number of trades during the day.
Foreign investors bought 180.59 million rupees worth shares while selling 147.80 million rupees worth shares.
Domestic investors bought 2.11 billion rupees worth shares while selling 2.14 billion rupees worth shares.
Ceylon Tobacco Company closed 18.50 rupees higher at 1,149.10 rupees, contributing most to the index gain.
Commercial Leasing and Finance closed 20 cents higher at 4.50 rupees and John Keells Holdings closed 1.50 rupees higher at 237.00 rupees.
JKH’s W0022 warrants closed 10 cents higher at 64.20 rupees and its W0023 warrants closed 50 cents lower at 71.00 rupees.
Dialog Axiata closed 10 cents higher at 10.90 rupees and Sri Lanka Telecom closed 60 cents lower at 55.90 rupees.
Commercial Bank closed 1.10 rupees lower at 142.90 rupees.
Hatton National Bank has granted its approval in principle, to acquire 51 percent of the issued and fully paid up voting shares of Prime Grameen Micro Finance for a total price of 660.00 million rupees subject to the satisfaction of certain conditions, the bank said in a stock exchange filing.
The transaction is expected to be concluded on or before September 30.
The Colombo benchmark All Share Price Index closed 12.02 points higher at 6,822.15, up 0.18 percent. The S&P SL20 closed 0.91 points higher at 3,760.33, up 0.02 percent.
Turnover was 2.29 billion rupees, up from 775.04 million rupees last Friday with 98 stocks closed positive against 95 negative.
Trade Finance and Investments closed 80 cents higher at 28.00 rupees with four massive off-market transactions of 1.18 billion rupees changing hands at 28.00 rupees per share contributing 52 percent of the daily turnover.
The aggregate value of all off-the-floor deals represented 62 percent of the turnover.
Central Investments and Finance closed 30 cents higher at 2.00 rupees, attracting most number of trades during the day.
Foreign investors bought 180.59 million rupees worth shares while selling 147.80 million rupees worth shares.
Domestic investors bought 2.11 billion rupees worth shares while selling 2.14 billion rupees worth shares.
Ceylon Tobacco Company closed 18.50 rupees higher at 1,149.10 rupees, contributing most to the index gain.
Commercial Leasing and Finance closed 20 cents higher at 4.50 rupees and John Keells Holdings closed 1.50 rupees higher at 237.00 rupees.
JKH’s W0022 warrants closed 10 cents higher at 64.20 rupees and its W0023 warrants closed 50 cents lower at 71.00 rupees.
Dialog Axiata closed 10 cents higher at 10.90 rupees and Sri Lanka Telecom closed 60 cents lower at 55.90 rupees.
Commercial Bank closed 1.10 rupees lower at 142.90 rupees.
Hatton National Bank has granted its approval in principle, to acquire 51 percent of the issued and fully paid up voting shares of Prime Grameen Micro Finance for a total price of 660.00 million rupees subject to the satisfaction of certain conditions, the bank said in a stock exchange filing.
The transaction is expected to be concluded on or before September 30.
12 Sri Lanka banks, 57 finance companies wrap up consolidation plans: Central Bank
Aug 04, 2014 (LBO) - Sri Lanka's regulator driven consolidation is on track with 12 banks and 57 non-bank lenders submitting plans for mergers and recapitalization, the Central Bank said.
Another 19 non-bank lenders have completed internal processes to allow them to submit the plans, the regulator said.
Already 19 proposals have been approved.
Consultants have completed Information Memoranda, Due Diligence Reports and Valuation Reports of 38 NBFIs which have been shared with 40 prospective partners.
Three micro-financiers have been given the nod.
The full statement is reproduced below:-
Financial Sectorn Consolidation Update - July 2014
The financial sector consolidation process made significant progress during July 2014.
Consolidation plans submitted to the Central Bank: Proposed consolidation/merger/acquisition plans were submitted by banks and finance and leasing companies (NBFIs), and those were reviewed and evaluated by the Central Bank. The proposed plans included acquisitions with timelines and price indications, mergers between NBFIs, envisaged infusions of capital by present shareholders, and infusions of capital by new investors.
Pursuant to the submission of such plans, the Central Bank management held meetinngs with members of the Boards of Directors and senior management of banks and NBFIs, with some of those meetings being with the intended merger/acquisition companies, on a joint basis. In the case of banks and NBFIs where mergers were agreed, discussions also covered the timelines for completion of the transactions and the way forward in the post integration period.
The Central Bank also granted in-principle approval for several consolidation arrangements.
Overall, the progress so far was as follows:-
*Panel of Audit Firms completed Information Memoranda, Due Diligence Reports and Valuation Reports of 38 NBFIs.
* The Central Bank shared these Reports with 40 prospective consolidation partners after entering into Non-Disclosure Agreements.
* 57 NBFIs and 12 banks submitted plans for mergers/acquisitions and infusion of capital.
* The Monetary Board approved 19 consolidation proposals, in-principle, and the respective companies were proceeding with the merger/acquisition processes.
* 19 NBFIs completed the internal processes in order to submit their proposals for the approval of the Central Bank.
Continuation of transaction management: The Panel of Audit Firms continued to assist in transaction management, by advising Banks and NBFIs on transactions as well as re. the smooth transitions after consolidation.
Price guidance for consolidation process: The Central Bank provided a price guidance for the proposed acquisitions/mergers on the basis of valuations carried out by the Audit Firms.
This was done in order to facilitate the conclusion of transactions at reasonable values, and thereby prevent the creation of possible price bubbles, which could be unhealthy for financial system stability in the future.
Micro finance sector: Three institutions have so far been given in-principle approval to undertake micro-finance business with improved capital, widened asset bases and satisfactory governance structures and practices.
On-going consolidation activities: Mergers of DFCC Bank, DFCC Vardhana Bank PLC and the National Development Bank PLC, as well as Merchant Bank of Sri Lanka PLC, MBSL Savings Bank Ltd., and MCSL Financial Services Ltd., continued to progress during the month.
Amendments to the respective legislation and approvals necessary for successful completion of the transactions were being attended, while the services of expert firms were availed of, to ensure smooth transition. The work relating to the acquisitions of Lisvin Investments Ltd. by Assetline Leasing Company Ltd., and Asian Finance Ltd. by TKS Finance Ltd. also progressed.
Announcements of new transactions: Certain banks and NBFIs made public announcements of agreed consolidation arrangements. These included the Commercial Bank of Ceylon PLC with Indra Finance Ltd., and Deshodaya Development Finance Company Ltd. with George Steuart Finance PLC.
Cancellation of leasing business licence: The licence granted to Koshiba Leasing Co. Ltd., to engage in leasing business was cancelled by the Central Bank at the request of the company, since the company did not wish to continue its operations under the consolidation plan.
Inclusion of Central Investments and Finance PLC (CIFL) within the consolidation process: During the month, the Court of Appeal dismissed the Stay Order issued against the CIFL re-structuring process. Consequently, the company has now been included within the master plan for consolidation, and the necessary action is due to be taken in the coming months to restructure the company, in accordance with a new plan that has to be developed.
Tax incentives: The Guidelines on Taxation in terms of the Inland Revenue (Amendment) Act No. 8 of 2014 and Value Added Tax (Amendment) Act No. 7 of 2014 on the tax incentives to support the consolidation process were approved by the Monetary Board, and are due to be issued on receipt of the concurrence of the Ministry of Finance and Planning.
IMF reaction to the consolidation process: The International Monetary Fund in its recently concluded Article IV Mission Report has expressed positive sentiment regarding the ongoing financial sector consolidation, highlighting that the programme offers a potential opportunity to increase the resilience of the system and contribute to more effective oversight.
Another 19 non-bank lenders have completed internal processes to allow them to submit the plans, the regulator said.
Already 19 proposals have been approved.
Consultants have completed Information Memoranda, Due Diligence Reports and Valuation Reports of 38 NBFIs which have been shared with 40 prospective partners.
Three micro-financiers have been given the nod.
The full statement is reproduced below:-
Financial Sectorn Consolidation Update - July 2014
The financial sector consolidation process made significant progress during July 2014.
Consolidation plans submitted to the Central Bank: Proposed consolidation/merger/acquisition plans were submitted by banks and finance and leasing companies (NBFIs), and those were reviewed and evaluated by the Central Bank. The proposed plans included acquisitions with timelines and price indications, mergers between NBFIs, envisaged infusions of capital by present shareholders, and infusions of capital by new investors.
Pursuant to the submission of such plans, the Central Bank management held meetinngs with members of the Boards of Directors and senior management of banks and NBFIs, with some of those meetings being with the intended merger/acquisition companies, on a joint basis. In the case of banks and NBFIs where mergers were agreed, discussions also covered the timelines for completion of the transactions and the way forward in the post integration period.
The Central Bank also granted in-principle approval for several consolidation arrangements.
Overall, the progress so far was as follows:-
*Panel of Audit Firms completed Information Memoranda, Due Diligence Reports and Valuation Reports of 38 NBFIs.
* The Central Bank shared these Reports with 40 prospective consolidation partners after entering into Non-Disclosure Agreements.
* 57 NBFIs and 12 banks submitted plans for mergers/acquisitions and infusion of capital.
* The Monetary Board approved 19 consolidation proposals, in-principle, and the respective companies were proceeding with the merger/acquisition processes.
* 19 NBFIs completed the internal processes in order to submit their proposals for the approval of the Central Bank.
Continuation of transaction management: The Panel of Audit Firms continued to assist in transaction management, by advising Banks and NBFIs on transactions as well as re. the smooth transitions after consolidation.
Price guidance for consolidation process: The Central Bank provided a price guidance for the proposed acquisitions/mergers on the basis of valuations carried out by the Audit Firms.
This was done in order to facilitate the conclusion of transactions at reasonable values, and thereby prevent the creation of possible price bubbles, which could be unhealthy for financial system stability in the future.
Micro finance sector: Three institutions have so far been given in-principle approval to undertake micro-finance business with improved capital, widened asset bases and satisfactory governance structures and practices.
On-going consolidation activities: Mergers of DFCC Bank, DFCC Vardhana Bank PLC and the National Development Bank PLC, as well as Merchant Bank of Sri Lanka PLC, MBSL Savings Bank Ltd., and MCSL Financial Services Ltd., continued to progress during the month.
Amendments to the respective legislation and approvals necessary for successful completion of the transactions were being attended, while the services of expert firms were availed of, to ensure smooth transition. The work relating to the acquisitions of Lisvin Investments Ltd. by Assetline Leasing Company Ltd., and Asian Finance Ltd. by TKS Finance Ltd. also progressed.
Announcements of new transactions: Certain banks and NBFIs made public announcements of agreed consolidation arrangements. These included the Commercial Bank of Ceylon PLC with Indra Finance Ltd., and Deshodaya Development Finance Company Ltd. with George Steuart Finance PLC.
Cancellation of leasing business licence: The licence granted to Koshiba Leasing Co. Ltd., to engage in leasing business was cancelled by the Central Bank at the request of the company, since the company did not wish to continue its operations under the consolidation plan.
Inclusion of Central Investments and Finance PLC (CIFL) within the consolidation process: During the month, the Court of Appeal dismissed the Stay Order issued against the CIFL re-structuring process. Consequently, the company has now been included within the master plan for consolidation, and the necessary action is due to be taken in the coming months to restructure the company, in accordance with a new plan that has to be developed.
Tax incentives: The Guidelines on Taxation in terms of the Inland Revenue (Amendment) Act No. 8 of 2014 and Value Added Tax (Amendment) Act No. 7 of 2014 on the tax incentives to support the consolidation process were approved by the Monetary Board, and are due to be issued on receipt of the concurrence of the Ministry of Finance and Planning.
IMF reaction to the consolidation process: The International Monetary Fund in its recently concluded Article IV Mission Report has expressed positive sentiment regarding the ongoing financial sector consolidation, highlighting that the programme offers a potential opportunity to increase the resilience of the system and contribute to more effective oversight.
SEC standing up to related-party deals
By Mario Andree
Ceylon FT: Capital market watchdog, the Securities and Exchange Commission, has managed to contain certain related-party transactions after introducing several regulations and requirements of disclosure, which would be made mandatory by 2016.
However according to SEC Chairman Dr. Nalaka Godahewa, the regulator was not imposing restrictions on businesses but was only keen to ensure transparency for the development of the capital market.
Several international fund managers and local activists repeatedly cautioned on related-
party transactions and requested proper management and transparency to ensure security of public funds.
Dr. Godahewa told Ceylon FT that the recent regulatory approaches taken by the market watchdog had been successful in ensuring transparency in related-party transactions, as many companies have started to disclose all related-party transactions, though it was still not mandated, and the public was talking about it.
He said that the SEC was not imposing restrictions on daily business activities, as 'companies know better how to do their business and improve performance.' However, he said, SEC required full transparency of business activity to safeguard the interest of investors, since 'companies need to disclose everything they do, so that the investor knows what's happening with their valuable assets."
He added that some of the regulations relating to related-party transactions, which are currently voluntarily, would be mandated in 2016 for better governance of the listed companies.
The Carlyle Group managing director for Indonesia Rajiv Louis of the US$ 200 billion fund management firm, which has a portfolio of US$ 20 billion in the Asia Pacific region, early last month said some of the leading fund managers in the world were interested in some emerging economies in Asia such as Sri Lanka, but were reluctant to invest due to poor governance issues such as the prevalence of heavy related party transactions.
Related-party transactions were impeding good governance, he said, as large fund managers were entering companies which yielded profits within five years, and though Sri Lanka was a promising place to make money, the issue of good governance was holding fund managers back.
www.ceylontoday.lk
Ceylon FT: Capital market watchdog, the Securities and Exchange Commission, has managed to contain certain related-party transactions after introducing several regulations and requirements of disclosure, which would be made mandatory by 2016.
However according to SEC Chairman Dr. Nalaka Godahewa, the regulator was not imposing restrictions on businesses but was only keen to ensure transparency for the development of the capital market.
Several international fund managers and local activists repeatedly cautioned on related-
party transactions and requested proper management and transparency to ensure security of public funds.
Dr. Godahewa told Ceylon FT that the recent regulatory approaches taken by the market watchdog had been successful in ensuring transparency in related-party transactions, as many companies have started to disclose all related-party transactions, though it was still not mandated, and the public was talking about it.
He said that the SEC was not imposing restrictions on daily business activities, as 'companies know better how to do their business and improve performance.' However, he said, SEC required full transparency of business activity to safeguard the interest of investors, since 'companies need to disclose everything they do, so that the investor knows what's happening with their valuable assets."
He added that some of the regulations relating to related-party transactions, which are currently voluntarily, would be mandated in 2016 for better governance of the listed companies.
The Carlyle Group managing director for Indonesia Rajiv Louis of the US$ 200 billion fund management firm, which has a portfolio of US$ 20 billion in the Asia Pacific region, early last month said some of the leading fund managers in the world were interested in some emerging economies in Asia such as Sri Lanka, but were reluctant to invest due to poor governance issues such as the prevalence of heavy related party transactions.
Related-party transactions were impeding good governance, he said, as large fund managers were entering companies which yielded profits within five years, and though Sri Lanka was a promising place to make money, the issue of good governance was holding fund managers back.
www.ceylontoday.lk
Bogala Graphite to start exploration at Rangala mines
Bogala Graphite Lanka Plc said that it will start an exploration program at the Rangala mines.
The company said Rangala mines, which it owns 100%, are located eight kilometres southeast of the Bogala mines.
“Significant commercial quantities of high purity graphite have been identified at the Rangala deposit, which last operated as an active mine in 1983. The company has applied for a mining license from the Sri Lanka Geological Survey and Mines Bureau for the Rangala deposit,” Bogala Graphite Lanka Plc said.
The financial impact of opening the Rangala mine has not been evaluated as yet, the company said in a filing to the Colombo Stock Exchange.
Bogala Graphite Lanka Plc is the largest producer of high purity vein graphite, which has very high levels of electrical and thermal conductivity due to its crystalline structure.
AMG Mining AG is the majority shareholder (90.3%) of the company. AMG is one of the world’s leading graphite producing and refining companies with mining activities in Asia, Europe and Africa. It is a subsidiary of AMG Advanced Metallurgical Group NV of Amsterdam.
In the first quarter of FY14, Bogala Graphite Lanka plc saw its revenue rise by 38% to Rs. 164 million and net profit almost doubling to Rs. 30 million from Rs. 16 million a year earlier. The first quarter bottom line is above full year result in 2013.
In 2013, the company’s revenue dipped by 3.7% to Rs. 536 million. This was mainly due to change in the product mix in sales resulting from the different grades of graphite that the company was able to extract during the early part of the year. However, the company ended the year with a Profit After Tax (PAT) of Rs. 24.8 million (up from Rs. 23.8 million) in 2012.
www.ft.lk
The company said Rangala mines, which it owns 100%, are located eight kilometres southeast of the Bogala mines.
“Significant commercial quantities of high purity graphite have been identified at the Rangala deposit, which last operated as an active mine in 1983. The company has applied for a mining license from the Sri Lanka Geological Survey and Mines Bureau for the Rangala deposit,” Bogala Graphite Lanka Plc said.
The financial impact of opening the Rangala mine has not been evaluated as yet, the company said in a filing to the Colombo Stock Exchange.
Bogala Graphite Lanka Plc is the largest producer of high purity vein graphite, which has very high levels of electrical and thermal conductivity due to its crystalline structure.
AMG Mining AG is the majority shareholder (90.3%) of the company. AMG is one of the world’s leading graphite producing and refining companies with mining activities in Asia, Europe and Africa. It is a subsidiary of AMG Advanced Metallurgical Group NV of Amsterdam.
In the first quarter of FY14, Bogala Graphite Lanka plc saw its revenue rise by 38% to Rs. 164 million and net profit almost doubling to Rs. 30 million from Rs. 16 million a year earlier. The first quarter bottom line is above full year result in 2013.
In 2013, the company’s revenue dipped by 3.7% to Rs. 536 million. This was mainly due to change in the product mix in sales resulting from the different grades of graphite that the company was able to extract during the early part of the year. However, the company ended the year with a Profit After Tax (PAT) of Rs. 24.8 million (up from Rs. 23.8 million) in 2012.
www.ft.lk
Harry J pumps Rs. 250 m more capital into Continental Insurance
Distilleries Company has infused Rs. 250 million in fresh capital into its fully-owned subsidiary Continental Insurance Lanka Ltd., in a vote of confidence on the industry’s prospects.
The infusion of additional capital bringing the total at Continental Insurance to Rs. 750 million by business tycoon Harry Jayawardena-controlled entity comes in the midst of a separate move by premier blue chip John Keells Holdings (JKH) announcing plans to divest control of its General insurance business via Union Assurance Plc, as well planned exit from Sri Lanka General insurance market by global giant AIG.
The minimum capital requirement per class of insurance business is Rs. 500 million but the move by Jayawardena to infuse a further Rs. 250 million, according to industry sources, reflects the Group’s confidence in the prospects of overall insurance industry as well as aggressive strategy to win more business. Continental is one of the six General insurance companies in the market.
JKH last week announced that it has signed a MOU with Fairfax Asia to divest 78% ownership of the General insurance business of its composite insurance subsidiary Union Assurance Plc.
Based on the projected financial statements of UAL as at 31 December 2014, and for the purpose of this transaction, the overall valuation of the General insurance business of UAL has been estimated at approximately Rs. 4.5 billion.
The deal will be done following the completion of the segregation of the UAL’s General and Life insurance business under a scheme of arrangement.
Despite the sale of control in general insurance business, JKH said UAL will continue to retain ownership of the Life insurance business in its entirety.
Recently AIG announced it will exit from Sri Lanka’s General insurance market.
The overall Gross Written Premium (GWP) Income for General Insurance businesses in 2013 amounted to Rs. 53.17 billion up by 7% from 2012. On the other hand the GWP income of the Long-Term insurance (Life) grew by 10.2% to Rs. 41.3 billion.
Industry regulator Insurance Board of Sri Lanka is preparing a new regime of risk based capital as well.
The insurance industry had 21 companies operating as at 31 December 2013. Of that 12 are composite companies (dealing in both General and Long-Term insurance businesses), six companies carry on General insurance business and three carry on only Long-Term (Life) insurance business.
Continental styles itself as one of the fastest-growing insurance companies in Sri Lanka and has been instrumental in providing innovative insurance products to the market. It offers tailor made insurance products for both personal and business requirements.
www.ft.lk
The infusion of additional capital bringing the total at Continental Insurance to Rs. 750 million by business tycoon Harry Jayawardena-controlled entity comes in the midst of a separate move by premier blue chip John Keells Holdings (JKH) announcing plans to divest control of its General insurance business via Union Assurance Plc, as well planned exit from Sri Lanka General insurance market by global giant AIG.
The minimum capital requirement per class of insurance business is Rs. 500 million but the move by Jayawardena to infuse a further Rs. 250 million, according to industry sources, reflects the Group’s confidence in the prospects of overall insurance industry as well as aggressive strategy to win more business. Continental is one of the six General insurance companies in the market.
JKH last week announced that it has signed a MOU with Fairfax Asia to divest 78% ownership of the General insurance business of its composite insurance subsidiary Union Assurance Plc.
Based on the projected financial statements of UAL as at 31 December 2014, and for the purpose of this transaction, the overall valuation of the General insurance business of UAL has been estimated at approximately Rs. 4.5 billion.
The deal will be done following the completion of the segregation of the UAL’s General and Life insurance business under a scheme of arrangement.
Despite the sale of control in general insurance business, JKH said UAL will continue to retain ownership of the Life insurance business in its entirety.
Recently AIG announced it will exit from Sri Lanka’s General insurance market.
The overall Gross Written Premium (GWP) Income for General Insurance businesses in 2013 amounted to Rs. 53.17 billion up by 7% from 2012. On the other hand the GWP income of the Long-Term insurance (Life) grew by 10.2% to Rs. 41.3 billion.
Industry regulator Insurance Board of Sri Lanka is preparing a new regime of risk based capital as well.
The insurance industry had 21 companies operating as at 31 December 2013. Of that 12 are composite companies (dealing in both General and Long-Term insurance businesses), six companies carry on General insurance business and three carry on only Long-Term (Life) insurance business.
Continental styles itself as one of the fastest-growing insurance companies in Sri Lanka and has been instrumental in providing innovative insurance products to the market. It offers tailor made insurance products for both personal and business requirements.
www.ft.lk
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