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Friday Sep 20, 2024
Monday, 15 September 2014 00:00 - - {{hitsCtrl.values.hits}}
The seller was BRAC Lanka Investments Ltd.
With this acquisition LOLC Group now owns 91.36% of BRAC. Previous LOLC Micro Investments Ltd., a wholly owned subsidiary of LOLC held 35.02% stake in BRAC.
Given its existing exposure, the LOLC Group said it sees the additional acquisition as an enhancement of its vision of financial inclusion.
Through the purchase CLC has triggered the SEC Takeovers and Mergers Code and will make the mandatory offer for BRAC shares at Rs. 9.70 each. Net asset per share of BRAC is Rs. 5.60 as at June 2014. Public float of the company is 5.65%.
In mid 2013, BRAC Lanka Investments and LOLC Group acquired 91% control of Nanada Finance and Investments Plc at Rs. 9 per share from its original owners. 
CLC has also approved working capital financing of up to Rs. 1.25 billion to BRAC to facilitate the repayment of working capital loans obtained from BRAC Group previously.
In May 2014, BRAC announced that it obtained a $ 4 million loan from BRAC International Holdings BC (ultimate parent) at an interest rate of 7% for a period of three years to expand its micro finance business operations. In March the company obtained a 3-year loan of $ 2 million also at 7% rate. At the same time, BRAC got a Rs. 100 million from Seylan Bank Plc at an interest rate of 9.5% against the foreign currency received. The foreign currency received was placed with Seylan as a fixed deposit bearing an interest of 4% to the company. BRAC engaged in this transaction (obtaining a SL Rupee loan against US$ deposit as a mechanism of hedging against foreign currency exposure).
The Central Bank approval has been granted for these arrangements.
BRAC Lanka Finance Plc is a company with a strong focus on micro finance with a customer base of over 68,000 borrowers and was actively growing its portfolio and its outreach. As at June 2014, BRAC had assets worth Rs. 2.36 billion and liabilities of Rs. 1.7 billion.
