Experts moot National Investment Fund for SOE restructuring

Thursday, 8 December 2022 03:28 - - {{hitsCtrl.values.hits}}

Templeton Deputy CEO Marius Dan

Several experts recently at a webinar identified listing as a better step to raise capital for SOEs. Franklin Templeton Deputy CEO of Corporate Strategy Marius Dan noted that listing was a good way of raising short-term funds without losing any control.

He said: “It could help Sri Lanka from doing any fire sales now. It would help the Government with any short-term funding gaps.”

The webinar was facilitated by the Daily FT, Sri Lanka Institute of Directors, International Chamber of Commerce Sri Lanka, CA Sri Lanka, and MBA Alumni Association of the University of Colombo.

Dan noted: “The listing of the National Investment Fund (NIF) on the Colombo and London Stock Exchanges could help the Government raise $ 400-500 million. Furthermore, at any point in time there is a need for additional funding, the Government will have the option of monetisation of stakes held in the NIF and/or the underlying portfolio companies at valuations that should be higher over time as a result of the efforts to increase efficiency and profitability.

“Such transactions, through Accelerated Book building Offerings, generally take 48-72 hours to execute,” he further observed. The creation of the NIF, its IPO, and the promotion of the country will allow large foreign institutional investors to access and invest in Sri Lanka, and will help raise the country’s profile around the world.

Additionally the fund managers can look at the best ways to integrate ESG standards into the assets to attract a broader base of foreign institutional investors. “ESG has become a global theme and fund flows have increased significantly into companies who show a commitment to improving their operating model.”