Swarnamahal Financial Services ups profit; talks with potential equity partners

Swarnamahal Financial Services has made a profit of Rs. 54.6 million for the year ended 31 March 2017, reflecting a significant improvement from a Rs. 257.5 million loss in FY15 and Rs. 16 m profit in FY16.

The company also expects adequate capital infusion to fulfill all Central Bank and other capital requirements to be completed in the current financial year 2017/18.

In a filing to the CSE, Swarnamahal Financial Services (SFS) said its parent ETI Finance Ltd. is undergoing a major restructuring in consultation with the Central Bank with the purpose of infusing capital into it.

Once equity is infused to ETIF, a part of its will be infused as equity capital to SFS as well. This infusion will either take place as a Rights Issue or as a directed issuance of new capital. 

Timely and adequate notice as per existing rules and laws of the CSE and the SEC will be given and all relevant approvals will be obtained for this capital infusion. The SFS Directors are also in discussions with potential equity partners for SFS and further announcements will be made when such discussions materialise. 

The SFS disclosure also said that the Central Bank has issued a direction to the company to implement a deposit liability reduction plan. The company has reduced its total deposit liability from Rs. 4.05 billion in March 2015 to Rs. 3.56 billion by 30 April 2017. The company is required to make further reductions up to Rs. 2.5 billion and the company has sought further time from the Central Bank to effect same.