Strong stakeholder confidence on People’s Merchant Finance’s journey

Chairman Chandula Abeywickrema

CEO Nalin Wijekoon

People’s Merchant Finance PLC continues achieving strategic milestones in its transformational journey. The latest being the oversubscribed rights issue aimed at strengthening its core capital requirements to fully meet CBSL compliance requirements by 31 March.

People’s Merchant Finance PLC (PMF) incorporated in 1983, is a licensed finance company operating within the Sri Lankan leasing industry for the past 36 years. Post the rights issue, 78.55% shares of the Company are held by Sterling Capital Investments Ltd. (SCIPL), its major investor. The balance shares are held by People’s Bank (10.36%), People’s Leasing and Finance PLC (7.65%), and the public (3.44%). 

The Company announced its renewal, revitalisation, and repositioning plan in mid-2019 when SCIPL became its primary investor and its foremost supporter for sustained future prosperity. Efforts were made to consolidate all aspects of business operations to enable the achievement of strategic priorities to emerge as a leading player in the financial industry of Sri Lanka. 

The Company recording Rs. 22.3 million as profit after taxation in the second quarter of the FY2020/21 after an extended 10-year period of losses followed by a second profitable and successful quarter ended 31 December 2020 which recorded Rs. 31 million as profits after taxation showcases the Company’s resilience and true grit. Following the chartered course of its planned transformation journey, PMF proceeded with, and successfully concluded, a rights issue in March 2021 as a measure to meet the minimum core capital requirements of Rs. 2 billion as stipulated by the Monetary Board of the Central Bank of Sri Lanka (CBSL) under the Finance Business Act Direction No. 02 of 2017 issued on 23 February 2017.

The rights issue which was delayed due to the outbreak of the COVID-19 pandemic was announced earlier this year and raised Rs. 811.87 million in funds with the issue of 115 million shares for Rs. 7.00 per share at its conclusion. It also successfully improved the Company’s governance and compliance frameworks thereby safeguarding the interests of all the stakeholders. The rights issue, which was mainly pursued to satisfy the CBSL core capital requirements, also improved the Company’s internal funds position. This influx of funds will be utilised to follow through with its ambitious business expansion and product diversification plans while enabling further operational enhancements. 

The Company expects it can further fast pace its new journey as these new funds will support PMF’s efforts to innovate products and services, increase adoption of technology, and continue to improve regulatory compliance factors within the Company’s business reach. The new funds will also create value for PMF’s stakeholders in the long term while enabling the Company to offer new in-demand products to the market and support the Sri Lankan Government’s Economic Development Agenda.

“PMF’s rights issue was oversubscribed,” says Chandula Abeywickrema, the Company’s Chairman. “For us, this was a fundamental insight to how stakeholders perceive our Company and the changes we have made to date,” he continued. According to Abeywickrema, the rights issue oversubscription also points towards the improving financial stability and reliability of PMF as well as the Company’s ability to move steadily forward with its five-year transformational strategic plan. 

The Chairman continues to attribute the Company’s recent success to the strength and stability brought to PMF by SCIPL, the professionalism of the new Board of Directors together with their extensive expertise and experience, and the dedicated efforts of the management team lead by a capable CEO in executing key initiatives and engagements at the right time in the right way. 

The success of the Company’s recent rights issue is expected to build the future confidence of existing and prospective stakeholders. There is also no doubt that PMF’s journey of success will not be gain stayed. Profitability amidst the unprecedented challenges encountered by the Company and its stakeholders due to COVID-19 is a fundamental premise for PMF’s belief. As PMF Chief Executive Officer Nalin Wijekoon reiterated, “We are on a steady and stable path of growth and prosperity. The Company made profits for the first time in a year where many organisations were negatively impacted. It gives me great pleasure to lead a team of dedicated professionals who have given their all even as they faced personal challenges. We [PMF] are on a path of achievements, and the support of all our shareholders and other stakeholders is duly noted and well-appreciated.”

The future of PMF remains unchartered with myriad emerging opportunities and possibilities for evolution within a changing business landscape. The Company will stay its course of change and continue to serve a wide cross-section of the nation’s people by offering them financial products that suit and meet their needs. PMF also aims to increase the financial inclusion of rural communities, women, and youth by supporting and empowering them to achieve financial independence and prosper to become economically viable individuals. The support given and shown by all stakeholders is the motivating factor for the Company to continue this journey despite challenges and obstacles, pursuing a path which fosters national economic growth, sustained business development, value creation for the PMF’s stakeholders.