LB Finance to buy 64.63% of Multi Finance for Rs. 400 m

LB Finance PLC will buy 64.63% stake in Multi Finance PLC for Rs. 400 million as part of the Central Bank approved Master Plan for consolidation of Non-Bank Financial Institutions (NBFIs).

In a disclosure to the Colombo Stock Exchange, LB Finance said it will be acquiring 64.63% of the issued shares of Multi Finance at a price of Rs. 9.72 per share. “The modality of the acquisition is under discussion and a further announcement will follow,” the disclosure added.

LB Finance said CBSL has approved the acquisition in principle and the subsequent capital infusion. As required by CBSL, LB Finance has provided an undertaking that necessary steps would be taken to immediately amalgamate the two companies once the current legal impediments are resolved.

As of 30 September 2021, the net asset value per share of Multi Finance was Rs. 7.26.

Multi Finance’s number of shares in issue is 63.61 million shares.

LB Finance will buy the stake held by Fairway Holdings Ltd., which has been pledged with Hatton National Bank. Entrust Holdings Ltd. owns a 29.93% stake.

As of 30 September 2021, Multi Finance held Rs. 453 million in retained losses. Assets amounted to Rs. 806 million and liabilities were Rs. 344.5 million.

Dhammika Perera-controlled Vallibel One PLC owns 51.7% of LB Finance and related party Royal Ceramics owns 26%. LB Finance’s retained earnings were Rs. 22.5 billion. Its assets as of 31 December 2021 were worth Rs. 154.6 billion and liabilities were Rs. 122 billion. Net asset value per share was Rs. 58.30.