Asia Asset Finance Limited (AAFL), a Sri Lankan registered finance company, a subsidiary of the Asia Capital group, is to go public with an IPO of 120 million shares at Rs 2.50 each. Mano Nanayakkara, managing director of AAFL and chairman of Asia Capital said he expects the company to grow fast given opportunities in the post-war economic recovery.
The issue opens on November 28, 2011 with the shares to be listed on the ‘Diri Savi’ second board of the Colombo stock exchange. AAFL plans to raise Rs. 300 million through the issue which amounts to a 21 % stake with the option of issuing 50 million more shares, going up to a 27.8 %, to raise a total of Rs. 425.4 million rupees, he said.
Director/CEO Rajiv Gunawardena told the Business Times that Asia Asset Finance, formerly known as Finance and Land Sales registered a net profit of 79.7 million rupees for the year to March 31, 2011 compared with a loss of 84 million rupees the previous year, he said. Earnings per share were 30 cents against a loss of 1.58 rupees the year before.
Some 90 % of funds raised through the IPO would be invested in core operations of the firm which includes leasing, hire purchase, corporate loans, three wheel, group personal loans, consumer financing, and pawning. The remaining 10 % would go towards branch expansion and product development. The firm plans to up its branch network from the current 10 to 19 by end of financial year 2012, mostly in the north and east regions, Mr. Gunawardena revealed.
New branches have been given a target of breaking even in the first three months and growing with a profit by 20 % a year, he added. The company has plans for securitisation starting in February 2012 to raise Rs 150 million in low cost funds using its hire purchase and leasing portfolio.