N.B.S.B. Balalle and Bede Fernando |
Ceylinco Finance Company PLC’s management said a rights issue is ‘on the cards’ to enhance share capital. At a media briefing this week, Executive Director and CEO Bede Fernando said the performance of the stock market will play a role in the company’s decision to go in for a rights issue in order to raise a ‘substantial amount.’
Mr. Fernando said that Ceylinco Finance is also looking for strategic partners as investors or for technical tie-ups and that a few institutions have also shown interest in this regard. He added that Ceylinco Finance is looking to raise a working capital of between Rs.600 to Rs.800 million, mainly to strengthen the business and decrease costs.
Mr. Fernando said Ceylinco Finance may liquidate its 10% stake in Seylan Bank which amounts to roughly 4 million shares. The company is also planning on obtaining a finance company license for which the capital requirement has already been met. He added that the company is looking towards securitization which is already in progress with a leading bank.
According to Mr. Fernando, Ceylinco Finance has not loaned or borrowed from any Ceylinco Group companies except from its own subsidiaries. He said the company is not expecting growth in 2009 but will be focusing on consolidation. It was also announced at the media briefing that retired CEO of National Saving’s Bank N.B.S.B. Balalle has taken over as the company’s non-executive Chairman over a month ago. Mr. Balalle said Ceylinco Finance has been well managed and has a lot of assets in the form of immovable property including some prime property in Colombo. He said there are 15 subsidiaries, most of which are performing well. In order to meet the company’s liabilities, Mr. Balalle said some of those assets will be liquidated in a move designed to give customers and investors confidence. Another retired banker, the former General Manager of People’s Bank Chandra Sahabandu has also joined Ceylinco Finance as a non-executive director.
Mr. Balalle said Ceylinco Finance has decided to change direction and reposition itself following an examination of its present operations.
The company will focus on its core business which is business relating to finance, and will diversify within these limits to undertake other services relating to finance. Mr. Balalle said the company sees a need to recommence business and aggressively market its products. He added that one of his duties in his capacity as non-executive Chairman is to ensure that good governance is adhered to and that the company complies with all directions set forth by the Central Bank (CB).
The total assets of the company are around Rs.9.5 billion while the value of the asset base is Rs.4 billion.
The total group net assets amount to Rs.1 billion. There are around 3500 investors and over 4000 credit customers and approximately 500 real estate customers. |
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