Corporate

NLF poised for steady growth

The Nation Lanka Finance PLC (NLF) revived investor confidence and the company is confident that its Rights Issue will be fully subscribed, said Chairman NLF, N.B.S.B. Balalle.

He said, the company is happy with the progress made on the Rights Isuue and added that many large corporates have shown interest in investing in the company.

Nation Lanka Finance launched the first Rights Issue this month to the value of Rs. 240 million for the expansion of its core businesses such as leasing, hire-purchase and lending.

NLF was formed in 1987 as Ceylinco Finance under the Ceylinco Group of Companies.

The company was rebranded this year following the crisis in the Ceylinco Group that triggered loss of confidence in many of the corporates.

"The sound strategic planning and rebranding helped revive businesses and the company is now poised to make steady progress", Balalle said.

He said there was a stigma attached to the former name and that there was an urgent need to rename the company and infuse confidence to forge ahead as a leading player in the leasing and hire purchase sectors.

"Despite many challenges the company paid over Rs. 1.2 billion to investors this year", Balalle said.

The company plans to increase the lending portfolio by Rs. 100 million per month.

Plans are also afoot to expand the branch network to the Northern and Eastern regions early next year.

The NLF operates 12 branches islandwide including one in Trincomalee.

The first branch in Jaffna will be opened next year.

"The company is eager to set up businesses in the North and the East which will benefit the economy of the regions.

We have laid the foundation and that would bring rich dividends to the country", the Chairman said.

The NLF has over 3,000 credit customers.

(LF)

Singer Finance invests In long-term stability and security

Increasing its stated capital to Rs. 400 million through a Rs. 200 million equity investment made by Singer (Sri Lanka), Singer Finance took a significant step towards further bolstering its strength and dependability. With this additional investment, Singer Finance currently has twice the stated capital mandated by the Central Bank of Sri Lanka (CBSL) for registered Finance Companies.

The Company commenced operations in 2004 as a specialised leasing firm and was registered with the monetary board of the CBSL in 2005 as a registered finance company. With over 125 years of credit exposure, Singer (Sri Lanka) is the main shareholder of Singer Finance, counting over 125 years of experience in the credit field and pioneering hire purchase in Sri Lanka. With its financial and management expertise, it has ably steered Singer Finance to a leadership position in the finance sector.

Singer Finance recorded Net Profit Before Tax of Rs 75 Mn and Net Profit After Tax of Rs 35 Mn during last ten months period ended 31 Oct 09 which is a significant achievement in profitability comparing with the current economic condition. Further, as of October 2009, Singer Finance's asset base has grown to Rs. 2.9 billion while shareholders' funds has increased to Rs. 473 million with the recent infusion of new stated capital. Additionally, as a result of the increase in stated capital, the Company's Capital Adequacy Ratio has increased to 16.55%, well over the minimum 10% ratio required by CBSL directions. The Company follows a very strict provisioning policy on Non-Performing Loans that is far more stringent than the stipulated minimum requirement of the CBSL to the industry. In spite of the difficult financial climate that prevailed, Singer Finance's deposit base has also grown to Rs. 1.39 billion.

Over the past five years, Singer Finance was engaged in the financing of all types of capital goods and agricultural equipment as well as products marketed by Singer (Sri Lanka).

Today, the Company has five fully fledged branches and four unique service centres located at Singer Plus outlets in the North Central, Uva and Southern provinces.

These service centres are one aspect of the Company's policy of providing the highest quality of service to outstation rural customers. Singer Finance is also involved in group sales to employees of various institutions, in both the public and private sectors.

ASAF invests Rs. 366m on Central Hospital

Aureos South Asia Fund closes an investment in Central Hospital (Private) Limited, Sri Lanka Aureos South Asia Fund LLC ('ASAsiaF') has invested Rs 366 million (US$ 3.2 million) for a 10% stake in Central Hospital (Private) Limited 'Central Hospital'. ASAsiaF is a fund managed by Aureos Capital, a leading private equity fund manager focusing on investments in mid-cap enterprises in emerging markets worldwide. ASAsiaF focuses on investments in India, Sri Lanka and Bangladesh.

Central Hospital is the latest private hospital in Colombo and is sponsored by Asiri Group which is the largest hospital chain in Sri Lanka. Asiri Group currently operates three hospitals in Colombo, and Central hospital is expected to absorb operations of one older hospital after commencing operations in the first quarter of 2010. Central Hospital is positioned as Asiri Group's Premium Brand hospital focusing on medical tourism in addition to serving the growing demand for private healthcare services in Sri Lanka.

This is the second investment in the healthcare sector by the ASAsiaF. In 2007, ASAsiaF invested in STS Holdings Ltd in Bangladesh which is the owner of first world class private hospital in Bangladesh.

John Keells Holdings PLC also co-invested in Central Hospital along with ASAsiaF.

PMFC's rating upgraded

RAM Ratings Lanka has upgraded People's Merchant Finance Company Ltd's ('PMFC' or 'the Company') long-term financial institution rating by 4 notches, from B+ to BBB-, with a stable outlook. Its short-term rating has also been revised from NP to P3. Concurrently, the Rating Watch (with a developing outlook) on PMFC's rating has been lifted. The steep upward revision of the Company's ratings is premised on the financial flexibility derived from its new ultimate, state-owned parent, People's Bank ('PB' or 'the Bank').

PMFC is a small registered finance company ('RFC') that falls within the regulatory purview of the Central Bank of Sri Lanka ('Central Bank'); the Company had an asset base of LKR 299.67 million as at end-March 2009. In March 2009, People's Merchant Bank PLC ('PMB') acquired 44.02% of PMFC. About 3 months later, PMB raised its stake to 99.90%, and renamed the Company as PMFC. In mid-October, PMB announced that it intended to amalgamate the assets and liabilities of PMFC by FYE 31 March 2010 ('FY Mar 2010'). PMB is an associate company of People's Bank (which owns a 39.20% stake), the second largest commercial bank in Sri Lanka. PMB's shares are listed on the Colombo Stock Exchange. PMB is presently a small specialised leasing company ('SLC'), with an asset base of LKR 2.84 billion; it too comes under the regulatory umbrella of the Central Bank.PMB's largest funding source is its ultimate parent, PB. As at end-March 2009, the Bank had extended LKR 660 million of facilities to PMB; this accounted for approximately 45% of the latter's bank borrowings. In addition, PMB has announced a rights issue for which its parent has already pledged support. PMB intends to raise LKR 250 million to retire its outstanding debentures and other short-term borrowings.