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Summit Finance Plc, under the new ownership of the Prime Group, is expected go beyond contemporary vehicle financing in serving SMEs and micro businesses with plans to raise more capital.
Real estate giant Prime Group on Monday acquired 75.5% of stake in Summit Finance Plc for Rs. 510 million from Sarvodaya Development Finance Ltd. Summit Finance Plc will be rebranded as Prime Finance Plc and will continue as a subsidiary of the Prime Group. The Prime Group will invest further capital of Rs. 207 million in Summit Finance and also raise a further Rs. 68 million from the general public to make it Rs. 275 million.
“Prime Group has the scale and resources, together with past experience in turning around loss-making finance companies into profitable ventures and we are confident that we will be able to strengthen and grow this finance company which already has a captivating market. This is great news for our customers and creates significant growth opportunities for our group business,” Prime Group Chairman B. Premalal said. Commenting on the acquisition, Prime Group Deputy Chairperson Sandamini Perera said: “We are very pleased and excited. This transaction will further strengthen the business we have developed and grown over 21 years. Also it will be a wonderful opportunity for our real estate customers who will have access to innovative financial loan products as well as all our stakeholders benefiting from this.”
The company will be expected to concentrate essentially on the high potential, untapped business needs of selected customer segments going beyond contemporary vehicle financing. While huge changes to the current business strategy are expected, new business strategies to exploit the group synergies by focusing more on the real estate requirements of customers who are not lucky enough to satisfy their financial requirements through banks will be drawn up. The company also stated that there are plans to develop and introduce new loan products to the SME and below SME segments by closely studying their credit appetite (non-consumption base) at affordable premiums.
The Prime Group is the leader in the real estate sector in Sri Lanka with more than 21 years of extensive experience in land, housing and property development. Currently, its land and property development projects span 13 districts, covering the depth and breadth of Sri Lanka. It has successfully completed over 1,000 land projects under its belt and over 32 apartment projects in Colombo and the suburbs. Over the years the Prime Group and its subsidiaries have earned most of the industry’s highest awards and accolades on numerous occasions both locally and internationally.
This isn’t its first foray into acquisitions in the field of finance for the Prime Group. The group acquired Grameen Micro Credit Company Ltd., a troubled and loss-making micro finance company in 2011 and turned it around to be a profitable top finance company within a short period of time.
Summit Finance Plc will maintain its head office in Colombo along with its six branch offices in Gampaha, Kalutara, Negombo, Wennappuwa, Kurunegala and Kandy and the branch network will be expanded in other areas of the island under the new leadership.
Prime Group stated that industry veterans and professionals would be appointed to its board of directors to bring tremendous experience and value to further strengthen and diversify it. The new board will comprise Mangala Goonatilleke – Chairman, Sandamini Perera – Deputy Chairperson, Brahmanage Premalal – Group Chairman, Nandana A. Wickramage – Director, Pathirage Anura Wijesiri Perera – Director, Mahinda Perera – Director, Dhammika Kalapuge – Director, H.M. Hennayake Bandara – Director and D. Pramuditha V. Mendis – CEO.
