Sri Lanka’s LB Finance debenture issue oversubscribed

LBO - Sri Lanka’s LB Finance 3 billion rupee debenture issue was oversubscribed, Monday.

The subscription list of the issue was opened on 4 December, the company said in a stock exchange filling.

Capital Alliance functioned as mangers to the issue.

LB Finance, is non banking financial company and also functions in the micro-finance sector in the island.

People’s Leasing completes acquiring 51-pct of Bangladeshi finance firm

LBO - People’s Leasing & Finance has completed the acquisition of 51 percent stake of the Bangladeshi finance firm, Alliance Leasing and Finance Company.

People’s Leasing has acquired 51,000,000 ordinary shares of Bangladeshi firm, which carries on the finance business under the Financial Institution Act, 1993 of Bangladesh.

People’s Leasing earlier said in a stock exchange filing that as the majority shareholder of the Bangladesh firm, People’s Leasing will have an entitlement to nominate a majority of the directors of Alliance Leasing and Finance.

On 15 May 2016, People’s Leasing entered into an agreement with Alliance Leasing and Finance for the acquisition of 51,000,000 ordinary shares, being 51 percent of the total issued capital of Alliance Leasing and Finance.

Sri Lanka doubles tax payer bailout of CIFL depositors

ECONOMYNEXT – Sri Lanka’s central bank has doubled the compensation payable to depositors of Central Investments and Finance PLC (CIFL), which failed owing to fraud, with no investor being found yet to pump in Rs. 3 billion to revive the finance company.

The central bank’s Department of Supervision of Non-Bank Financial Institutions said every effort will be made to take legal actions against those responsible for frauds and misuse of depositors’ funds of failed finance companies.

CIFL was confronted with severe liquidity crisis since 2013 due to mismanagement and other irregular transactions carried out by the management of that company, a statement said.

“It has also been observed that the directors and senior management of these companies have fraudulently inflated the value of the assets and the examination of the documents relating to such assets has revealed that those are either fictitious or entangled with encumbrances.”

CIFL has not been in operation since 2014 and the central bank last month decided to issue a notice of cancellation of its licence.

The total deposit liability of the company is about Rs. 3.5 billion and the number of depositors is 4,092.

Of those, 2,501 depositors are with deposits less than Rs. 600,000/-.

Under present regulations, the maximum amount that can be paid under Sri Lanka Deposit Insurance and Liquidity Support Scheme is Rs. 300,000.

“However, the Monetary Board having considered the plight of the small depositors has decided to double the compensation from Rs. 300,000/- to Rs. 600,000/-,” the central bank said.

“Accordingly, in the case of CIFL, 61% of the depositors will be fully settled with their deposits.”

The Central Bank also said it has extended the deadline given to a potential investor on several occasions to prove the availability of funds to revive CIFL “which has not been fulfilled as yet.”


The central bank has had discussions with local and foreign institutions and individuals who expressed their interest in investing and reviving the company.

It said any revival plan needs at least Rs. 3 billion investments and at least 30-40% of the deposits should be repaid immediately as they had not been paid interest or the capital of their deposits for the last 4 year period.

It also said that with regard to the Standard Credit Finance Ltd and City Finance Corporation Ltd, the Monetary Board has not issued notices of cancellation as there are legal issues to be resolved.

Sri Lanka's Jetwing Symphony hotel group seeks up to Rs900mn in IPO

ECONOMYNEXT - Sri Lanka's Jetwing Symphony, a collection of new and hotels under construction is seeking up to 900 million rupees through an initial public offering of 50 million shares.

The firm is offering shares at 15, 16, 17 and 18 rupees, and shares will be allocated from the highest price down, with 40 percent of the offer reserved for retailers, 10 percent for unit trusts and 50 percent for others, the offer document said.

The firm had 451.96 million shares in issue as of September 2017.

Jetwing Symphony has four operational hotels. Jetwing Yala has been running since November 2013, Jetwing Kaduruketha (in Wellawaya) since December 2015, Jetwing Lake (Dambulla) since December 2016 and official launch in May 2017 and Jetwing Colombo Seven from February 2017.

Jetwing Surf in Pottuvil is expecting to start operations in soon with 90 percent of construction completed.

Jetwing Kandy Gallery is a project pending approvals, which is expected to be completed in 2019, and Jetwing Reef in Uppuvelli, which is now in the planning stage.

Jetwing Yala, turned around after two year and showed a profit of 18 million rupees in the 2017 financial year, the prospected used.

In the year to March 2017 the firm lost 149 million rupees from revenues of 734 million rupees, most of which came from Jetwing Yala.

The subsidiary firms have 605 employees.

The firm has loan facilities of 3.4 billion rupees and overdraft facilities of 837 million rupees. About 350 million rupees of the IPO proceeds will be used to reduce debt. The IPO document said gearing was 44 percent in the 2017 financial year.

Top shareholders were Jetwing Travels (Pvt) Ltd, with 20.75 percent (93.76mn) and ROK Holdings International Limited with 20.11 percent who had been issued stock earlier at 11 rupees per share when a billion rupees was invested in the group.

ROK Holdings is connected to Giuseppe Rocchi, an Italian national who has already invested in factories in Sri Lanka.

Blue Oceanic Hotels with 1.65 percent, Employees Provident Find 7.84 percent, NJ Cooray Builders (Pvt) Limited 6.44 percent and AMJ Cooray 6.06 percent are among other current shareholders.

Sri Lankan shares extend fall to near 3-month closing low

Reuters: Sri Lankan shares extended falls into a second session on Tuesday and closed at their lowest in nearly three months, dragged down by beverage stocks.

The Colombo Stock Index ended down 0.24 percent at 6,390.55, its lowest close since Sept. 14. It fell 0.03 percent last week, recording its fourth straight weekly drop, but has gained about 3 percent so far this year.


Worries over a delay in local council polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment, said analysts.

Meanwhile, the Election Commission said on Monday that the council polls would be held before Feb. 17.

Investors are concerned about political stability as coalition partners in President Maithripala Sirisena government had decided to contest separately in the council polls.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented last month, with a final budget vote scheduled for Dec. 9.

Analysts said market participants were seeking more clarity on those taxes and that there could be some amendments before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislation.

Shares in Nestle Lanka Plc fell 1.5 percent on Tuesday, Commercial Leasing & Finance Plc ended 6.9 percent weaker, and Lanka ORIX Leasing Co Plc dropped 1.2 percent.

“The market is down on low volumes but the turnover was pushed by foreign to foreign block deals,” said Dimantha Mathew, head of research at First Capital Holdings.

“Local investor participation was low.”

Foreign buying accounted for 64 percent of the day’s turnover, which was 917.8 million rupees ($6 million), less than this year’s daily average of 943.3 million rupees.

Foreign investors were net buyers of equities worth 90.3 million rupees, extending the year-to-date net foreign inflow so far this year to 18.8 billion rupees worth of shares. 

($1 = 153.3500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)