Many firms in talks with funding agencies
View(s):Many Sri Lankan listed firms – especially finance companies – are in discussion with international funding agencies for funding lines, company sources said.
They said that the Netherlands Development Finance Company (FMO), International Finance Corporation (IFC) and DEG (German Investment Corporation) are bullish on Sri Lanka. “These agencies are in discussion with local firms to extend funding,” a top CEO told the Business Times.
He said that Development Funding Institutions (DFIs), which lend in developing markets such as Sri Lanka, want local lending institutions to maintain perfect operating standards and implement international best practices in order to obtain funding.
Recently Citizens Development Bank (CDB) obtained its first foreign funding line from Belgian Investment Company for US$ 6 million (Rs.780 million). The funding line comes with tenure of four years and has been fully hedged against any exchange rate fluctuations on a fixed interest rate. This funding line has been offered to CDB by BIO based on a comprehensive initial field survey.
Late last year, Softlogic Capital said that FMO will pay Rs 7.78 million to buy 60,796 shares in it and Rs 904.2 million to buy 7.06 million shares in Asian Alliance. The company also said that DEG will pay Rs 912 million to buy 7.1 million shares from Softlogic Capital Plc. “The funding is intended to boost the Tier II capital adequacy of Softlogic Finance over 16 per cent as at March 2013, well in excess of the regulatory requirement of 10 per cent,” an analyst said.