Nation Lanka Finance upbeat with Rs. 1.4 b fresh equity infusion
Thursday, 13 February 2014 00:00
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Former ERI-duo Scott and Kosala make a comeback with Yenom Ltd which secured investment by GEM Global Yield Fund for Nation Lanka Finance
Nation Lanka Finance PLC is upbeat on future success and stability following the agreement with a global fund to secure Rs. 1.4 billion in fresh equity infusion.
The Company last week announced the signing of an agreement with GEM Global Yield Fund to receive a fresh equity infusion of Rs. 1.4 billion initially; comprised of Rs. 700 million in private placement and Rs. 674 million in private unlisted warrants, to support its lending business including the micro lending program and also to enhance the core capital.
The price and the volume of shares to be issued by way of the private placement will be determined by the agreed upon formula by the company and the investor, which is driven by the actual market price and average volumes based on a 15 market day period.
In terms of warrants, the company will issue 67.5 million private unlisted warrants to the investor with an exercise price of Rs. 9.99 totalling Rs. 674 million, with each warrant equivalent to one ordinary share.
According to Nation Lanka Finance PLC CEO Charith Amarasekara, the private placement and the warrants both will not exceed 29.9% stake of the company.
“We have just signed an agreement for our initial fund requirement for Rs. 1.4 billion, and plan to secure additional long-term funding very soon. To get the shareholder’s blessing an EGM will be held in the days to come and we are now in the process of preparing paper work for regulatory approvals from the CSE, SEC and the Central Bank of Sri Lanka,” he said.
“We contracted Yenom Ltd. to help us find a dynamic investor that could help fund Nation Lanka Finance PLC so that we can capitalise on the growth potential in the financial industry. Entire process was signed and completed in less than three months, which has allowed us to fast track our growth strategy for 2014 and opening up new horizons for our future,” he added.
As at 30 September 2013, Nation Lanka Finance PLC has around 250 million shares in issue with a Net Asset Value (NAV) per share of around Rs. 1.2. It has assets worth Rs. 4.3 billion as at end September 2013, up from Rs. 3.6 billion a year earlier. Liabilities amounted to Rs. 4.0 billion, up from Rs. 3.2 billion. Nation Lanka Finance PLC in the first half of FY14 posted a Net Profit of Rs. 48 million, as against a loss of Rs. 187 million a year earlier.
“We have already made plans to disburse new funds very quickly to yield the maximum returns to the company. The fresh capital of Rs. 1.4 billion itself will appreciate our Net Asset Value (NAV) per share by roughly Rs. 4 taking the overall NAV to over Rs. 5 per share. But with the returns we anticipate on our investments, especially in Micro Finance, we expect our NAV to climb very fast to levels above Rs. 10 per share in the near-term giving maximum upside to our valued shareholders,” CEO Amarasekara said.
Global Emerging Markets Ltd. (GEM) was founded 1991. GEM, having completed 305 transactions in 65 countries, is an alternative investment group that handles a diverse set of investment vehicles across the world. GEM`s worldwide funds include; CITIC/GEM Fund; VC Bank/GEM Mena Fund (exited in Q1, 2010); Kinderhook; GEM Global Yield Fund; GEM India Advisors and GEM Brazil PE Fund.
Nation Lanka Finance PLC is a Public Limited Liability Company incorporated in Sri Lanka on 15 July 1987 under the Company’s Act No. 17 of 1982 and re-registered under the Companies Act No.07 0f 2007.
The company is also a finance company approved and regulated by the Central Bank of Sri Lanka. During the past 25 years the company built its reputation on strong connections with local communities. With 23 branches throughout Sri Lanka, Nation Lanka Finance PLC is well placed to support our communities at a local and international level using its strategy is built around customers, putting them at the center of everything the Company does and helping them realise their potential.
Yenom Ltd. provides direct and facilitated investments for companies and private/government projects through various structured products. Yenom is owned and operated by the two former operating directors of ERI, Dr. Kosala Heengama and Gregory Scott Newsome. Yenom together with their foreign partners are pleased that they could introduce another global investment fund into Sri Lanka’s equity and investment market.
