Pelwatte Sugar under liquidation

Sri Lanka's first Colombo Stock Exchange- listed sugar growing and manufacturing company Pelwatte Sugar Industries PLC is under liquidation.SJMS, Joint Liquidators, in a filing to the Colombo Stock Exchange dated December 18, 2004, under the topic Commercial High Court of Western Province Colombo Case No: HC (Civil) 46/2012/CO said: We refer to your letter dated 05-12-2014 and the discussion your officers had with us previously regarding the above company and wish to confirm you that the above said company is presently under winding-up as per the order made by the above said Court with effect from 12-03-2013. A certified copy of the said Court Order is sent herewith as requested.

Under present status of the liquidation of the company, SJMS has told the CSE:

a. Vesting of company assets in the State:
The leasehold land obtained by the company from the State was vested in the State with effect from 11.11.2011 under the provisions of Revival of Under performing Enterprises or Under-utilized Assets Act No. 43 of 2011. However, as per the information furnished by the former management of the company the Competent Authority (CA) appointed under the said Act has taken over the entire assets of the company and its business operations, prior to the winding up order was made by the Court. The inventory of the assets taken over by the State has not yet been furnished to us by the CA.

Since most of the assets of the Company and its business operations were not vested in the State under the said Act, we have requested the Competent Authority – the Secretary of the Ministry of Sugar Industries, to provide us the inventory of the assets vested in the State under the provisions of the said Act and to handover the balance assets not vested in the State, to us. We have not received any response in this regard up to date from the Competent Authority, despite several reminders.

b. Claim submitted to the Compensation Tribunal:
Liquidators have submitted their claim for compensation on behalf of the Company under Liquidation, the Compensation Tribunal appointed under said Act. The claim was based on the market value of the company shares and the creditors' liability of the company as at the relevant date, as the entire assets of the company and its business operations were taken over by the competent authority.

However, the tribunal was of the view that they have no mandate to assess the compensation as claimed by the liquidators since what was vested under the said Act was only the leasehold land held by the company.

Under these circumstances, the Liquidators have requested the Chairman of the Compensation Tribunal to refer the matter to the Attorney General and seek his advice in this regard.

Even though a Meeting in this regard was convened by the AG's Department in April 2014, unfortunately it was postponed indefinitely.

c. Creditors & Shareholders Claims received by Liquidators:
Consequent to the publication of Notices of winding up of the Company and our appointment as the liquidators, number of Creditors and shareholders of the Company have submitted their claim against the Company to us.

Any shareholder of creditor of the company who has not yet submitted his or her claim could submit his/her claim to the liquidators.

However, the settlement of the claims will be made in accordance with the provisions of the Companies Act No. 07 of 2007 depending on the amount of compensation to be awarded by the compensation tribunal.

All these matters have been reported by us to the winding up court regularly, SJMS has told the Colombo Stock Exchange.

www.ceylontoday.lk

Bonanza for senior citizens! 280,000 retirees to get 12% interest on FDs tax free

By Menaka Indrakumar

Ceylon Finance Today: Over 280,000 senior citizens would be benefitting from a government announcement that fixed deposits worth more than Rs 2.5 million maintained at State banks by senior citizens, will receive an increased 12% interest rate and that earnings would be interest free.

This is a Budget 2015 proposal and would be implemented with effect from 1 January, Deputy Secretary to the Treasury Dr. Suren Batagoda told Ceylon FT yesterday. "There will be 280,000 senior citizens who will be getting an added interest which will also be tax free, he said.

He also said that Rs 30 billion was allocated in Budget 2015 for this purpose and if the need occurred, the government will increase the amount. The Finance Ministry also requests senior citizens to inquire from banks about their eligibility for this benefit.
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We will replace Port City with Western Province Metropolis – Ranil

By Skandha Gunasekara and Shaahidah Riza

Ceylon Finance Today: Opposition and UNP Leader Ranil Wickremesinghe said Tuesday that a government under him as Prime Minister would halt the port city which had been envisioned by the Mahinda Rajapaksa Government and replace it with a much larger 'Mega-polis' that would encompass the Western Province in its entirety.


Addressing the business forum, 'Lets Unite' held at Cinnamon Lakeside, Wickremesinghe alongside and Common Presidential Candidate Maithripala Sirisena addressed corporate leaders and senior business officials on the policies of a possible Sirisena Government would adopt.
The establishment of a 'Megapolis' was first suggested in 2002-2003, and the Port City was a small part of it. The 'Megapolis' project would transform the entire Western Province into a fully developed modern city."

He went on to say that the Port City project would not be stopped but halted temporarily.
"We haven't completely scrapped the Port City project. However, if we come to power we will first take into account the environmental impact report, as well as a feasibility study before we go further with the project." Wickremesinghe observed.

Wickremesinghe stressed, that environmental impact of any project was of vital importance when considering its implementation and that a Sirisena Government would take global warming into serious consideration. "We are looking into sustainable development. Global warming is a grave issue and we are seriously considering its impact on our economy. We will go green. The world is pivoting towards sustainable energy and development."

The Leader of the Opposition went on to say that feasibility of any project proposed by a government headed by Sirisena, would be taken into account citing the heavy debts incurred by the nation for the construction of the Hambantota Harbour and the Mattala Airport.

"Feasibility of any project will be of paramount importance. The country has billions in debt as a result of projects taken up without proper consideration," he noted.
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Issuer Rating of Orient Finance revised to [SL]BB+: outlook revised to stable

ICRA Lanka Limited, a wholly owned subsidiary of ICRA Ltd, a group company of Moody’s Investors Service, has revised the Issuer rating of Orient Finance PLC (OFP) to [SL]BB+ (pronounced SL double B plus) from [SL]BBB- (pronounced SL triple B minus)1 . The outlook on the rating has been revised to stable from negative.

ICRA Lanka’s rating revision follows the continuous weakening in OFP’s key performance indicators. The company’s asset quality deteriorated significantly during the current financial year, with gross NPAs increasing to about 9.7% in Jun-2014 before moderating in Sep 2014 to about 8.5%, it continues to remain significantly higher than the systemic levels. The above had a cascading effect on the profitability of the company, with PBT/ATA2 moderating to 2.3% for FY20143 (1.2%, provisional in H1FY2015) as compared to 6.3% in FY2013, as the provision costs witnessed a steep increase. ICRA takes note of the robust growth in the company’s portfolio, with overall portfolio growing at 33% in FY2014 (36%, annualized in H1FY2015); consequently, the company’s gearing increased to 4.5 times in Mar 2014 (5.3 times provisional in Sep 2014) vis a vis 3.3 times in Mar 2013.. The rating continues to derive strength from the financial, operational and management support that OFP is expected to receive from the Janashakthi group. The rating also factors in the experienced and professional management team coupled with the improvements in overall risk management systems by the company in the recent past.

ICRA Lanka however believes that the impact of the above could be observed in a gradual manner and the key performance indicators are expected to remain under pressure till then. ICRA Lanka also notes that OFP’s liquidity position has weakened in the recent past due to increase in the share of fixed deposits (FDs; about 54% of the borrowing in Sep 2014 vis a vis 21% in Mar 2014) and higher concentration towards shorter term fixed deposits (about 63% of FDs Maturing in less than one year period as in Sep 2014) in its funding mix leading to high near term Asset-Liability mismatches. The key rating sensitivities for OFP, going forward, would be to improve its liquidity profile by diversifying its funding, arresting incremental slippages and to make effective recoveries, which in turn would result in a gradual improvement in the key profitability indicators.

OFP’s core lending operations continue to be focused on auto financing (approximately 83% of total portfolio). Factoring, being the second largest product segment, accounted for approximately 16% of the company’s total portfolio as of end Sep 2014. Pawning (introduced in FY2013) accounted for less than 1% of OFP’s total portfolio. The company has discontinued its equipment finance division due to high portfolio losses in this segment. ICRA Lanka notes the company’s strategy is to focus on higher end auto financing and factoring going ahead in order to improve the overall quality of the portfolio. OFP’s auto financing.
www.island.lk

Deposit insurance coverage up 50% to Rs. 300,000

Central Bank said yesterday that in line with the decision announced in the Budget 2015 to increase the deposit insurance cover by 50%, the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will increase its deposit insurance coverage per-depositor per-institution from Rs. 200,000 to Rs. 300,000, with effect from 1 January 2015.

Central Bank said the regulation on the revised insurance cover has been published in Gazette Extraordinary No. 1891/11 of 2 December 2014 under the citation ‘Sri Lanka Deposit Insurance and Liquidity Support Scheme Regulations, No. 1 of 2014’.

SLDILSS was established in October 2010 in the interest of the overall financial system stability of the country to protect depositors from failure of financial institutions and thereby to promote the stability of financial institutions by maintaining depositor-confidence. It is operated and managed by the Monetary Board of the Central Bank of Sri Lanka.
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