Deshodaya completes 70% buy of George Steuart Finance
Friday, 26 September 2014 00:51
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Deshodaya Development Finance Company Ltd. (DDFC) has completed the acquisition of a 70% stake in George Steuart Finance Plc for Rs. 350 million.
This was as part of the Central Bank-initiated financial sector consolidation.
The acquisition of 15.8 million shares at Rs. 22.20 each was via the Colombo Stock Exchange. George Steuart and Company sold 11.47 million shares and Capital Trust Holdings sold 4.3 million shares.
George Steuart Finance’s number of shares in issue is 22.5 million and DDFC has announced a mandatory offer to acquire the remaining stake. The deal was originally announced on 21 July with DDFC indicating a valuation of Rs. 500 million for the 100% stake of George Steuart Finance. Net asset per share of GSF as at 31 March 2014 was Rs. 14.61.
DDFC was launched by social entrepreneur A.T. Ariyaratne of Sarvodaya fame. The planned acquisition was first announced on 21 July. Net asset per share of GSF as at 31 March 2014 was Rs. 14.61.
As at 31 March 2013, the unlisted DDFC had a core capital of Rs. 587 million. Its loan portfolio was Rs. 3.3 billion and net loans and receivables amounted to Rs. 2.58 billion. With over 30 branches its deposit base was Rs. 2.77 billion and after tax profit amounted to Rs. 31 million, up by 11% over FY12.
As at 31 March 2014, George Steuart Finance had Rs. 329 million in shareholders’ funds including Rs. 90.6 million in retained earnings and Rs. 225 million in stated capital.
Customer deposits amounted to Rs. 1.06 billion, up from Rs. 699.6 million a year earlier. Total liabilities were Rs. 1.17 billion, up from Rs. 808.5 million. Assets were worth Rs. 1.5 billion, as against Rs. 1.1 billion on 31 March 2013. Loans and advances were Rs. 730 million, up from Rs. 397 million whilst lease rentals were Rs. 309 million, down from Rs. 425 million. The company also had Rs. 243 million in placements with banks and other financial institutions, in comparison to Rs. 115 million a year earlier.
George Stuart Finance ended FY14 with a pre-tax profit of Rs. 5.9 million, lower compared with Rs. 12 million posted in the previous year. Net profit for the year was Rs. 6.6 million as against Rs. 3.6 million in FY13 which involved a higher provision of Rs. 8.4 million for income tax.
Interest income had grown from Rs. 216 million in FY13 to Rs. 280 million and net operating income was Rs. 133.5 million, higher in comparison to Rs. 117.5 million in FY13.
