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Wednesday, 29 March 2017 01:29 - - {{hitsCtrl.values.hits}}
Laugfs Terminals Ltd. is to obtain $ 42.6 million (around Rs. 6.6 billion at current exchange rate) for its LPG Terminal which is under construction at the Hambantota Port.
The terminal, whose total cost is $ 71.5 million (around Rs. 11 billion), has a storage capacity of 30,000 metric tonnes with export and import facilities.
Laugfs said it is to obtain long-term banking facilities up to the limit of $ 42.6 million from People’s Bank to finance the project. In this regard, Laugfs Gas Plc has agreed to provide a corporate guarantee to the same value as security which will be effective until the banking facilities are settled in full.
Laugfs hopes to settle the borrowing from income generated from the LPG storage and terminal operations by the wholly-owned subsidiary.
The facility has been obtained on normal commercial terms and in the ordinary course of business from People’s Bank.
The aggregate value of the related party transactions for the current financial year with Laugfs Terminals Ltd. for Laugfs Gas Plc is Rs. 7.98 billion (inclusive of Rs. 6.55 billion as a contingent liability for the corporate guarantees issued by the parent) and the aggregate value of all related party transactions is Rs. 11.67 billion (inclusive of Rs. 6.8 billion as Contingent Liabilities for aggregate corporate guarantees given by Laugfs to its subsidiaries during FY17).
According to the latest audited financial statements of Laugfs Gas, 10% of the equity is Rs. 841 million and 5% of the total assets is Rs. 1.21 billion.
Since the total assets of Laugfs Gas Group are Rs. 24. 3 billion (excluding intangible assets of Rs. 3 billion), as per audited financial statements as at 31 March 2016, and the value of the latest related party transaction or the aggregate of the related party transactions with Laugfs Gas Terminal doesn’t exceed one-third of the total assets of the Group, Laugfs Gas Plc said shareholder approval is not required for the said transaction.
Laugfs Gas Plc has also transferred Rs. 5 million to Laugfs Terminals Ltd. as part of its equity investment.
The bank`s asset growth was purposely slowed down during 2016 for want of capital and to maintain regulatory capital adequacy levels.
New capital infusion will boost the ability of SDB Bank to rapidly grow its asset base in the medium term.
This, together with the ongoing re-engaging process, will result in the substantial enhancement of its revenue and profitability.
