UB Finance announces Rs. 55 m IPO to list on CSE

Monday, 10 July 2023 00:10 - - {{hitsCtrl.values.hits}}

Chairman Atul Malik

Director CEO

Ransith Karunaratne

UB Finance Company Ltd. (UBF or Company), a subsidiary of Union Bank of Colombo PLC would be the latest addition to the Colombo Stock Exchange (CSE) as it plans to carry out an Initial Public Offering (IPO) of 55 million ordinary voting shares at Rs. 1 per share.

The IPO is scheduled to open on 20 July and is a prime opportunity to invest in a Licensed Finance Company (LFC) backed by a licensed commercial bank, a statement said.

The Company is set to debut on the Diri Savi Board of the CSE subject to compliance with the CSE Listing rules and will be one of the first IPOs post announcing of the local debt restructuring framework. The issue will be managed by NDB Investment Bank Limited (NDBIB). The Company embarked on the listing process in compliance with the Central Bank of Sri Lanka (CBSL) requirement for all LFCs to be listed on the CSE.

In 2021, UBF successfully raised Rs. 1.99 billion via a rights issue to strengthen the Company’s balance Sheet and meet the revised capital thresholds set out by the CBSL. The Company has a high capitalisation ratio with an unimpaired core capital of Rs. 2.54 billion and a Tier 1 Capital Adequacy Ratio and Total Capital Adequacy Ratio of 31.07% and 31.07% respectively as at 31 March comfortably exceeding CBSL thresholds.

The Company has established itself as a leading LFC in the financial services space since its acquisition in 2011 by Union Bank of Colombo PLC together with its strategic investment partner ShoreCap II Ltd. (a US-based social impact fund).

UBF specialises in asset-backed financing for SMEs, successfully catering to its customers’ diverse needs with an extensive range of financial products and services, including fixed deposits, savings, leasing, loans, mortgages, easy drafts, real estate, gold loan solutions, etc. The Company’s contribution towards serving the non-banked space of the economy is notably influenced by the social impact mind-set of UBF’s second largest shareholder, ShoreCap II.

Fitch Ratings recently assigned UBF a first time National Long-Term Rating of ‘BB (lka)’ (RWN).

Drawing from the corporate governance practices and financial strength of its two major shareholders, the Company operates on the basis of integrity and customer empowerment, creating new opportunities and delivering unique customer experiences through its 17 branches and multiple customer - dealer touch points across the island. In line with the financial and economic restructuring of Sri Lanka, UBF remains committed to its vision of being “A Preferred Financial Services Provider” fostering growth for SMEs and contributing to the economic development of the country.