Latest effort to revive the company likely to be launched this week
Company had appealed to CB for fresh round, arguing investment climate has improved now
Limited time to be given; cancelled licence not detrimental for investor search
Posts Rs. 1 b loss in 1Q; retained losses nears Rs. 28 b
The Finance Company may call for a fresh round of Expressions of Interest (EOI) as early as this week, a Central Bank official said.
Central Bank Deputy Governor H. A. Karunaratne said The Finance Company (TFC) has requested a fresh round of EOIs as in their view, the investment climate has improved recently. In October, the Central Bank cancelled the licence of TFC but said that does not prohibit the company from submitting fresh investor proposals from credible candidates.
“During the last two years, we have been struggling to resolve issues of finance companies so we would be continuing with the resolution framework. Some of them have said there are difficulties to revive, therefore we have decided to take some measures on them,” Karunaratne told reporters on Friday
“Right now, the situation is we are again trying to see whether we can have one more EOI because TFC has said that when the EOI was brought the last time, there wasn’t a conducive environment in the country to get the investors, so we are trying to see whether we can float an EOI. That will be done by the company. It will be done within this week. Limited time will be allowed for investors to come in and see, otherwise we will have to cancel the licence again.”
In the three months ended on 30 June, The Finance reported a pre-tax loss of Rs. 1 billion, up from a Rs. 743 million loss a year earlier. As at end-June, it had an accumulated loss of Rs. 28 billion.
Total liabilities amounted to Rs. 30.8 billion, including deposits worth Rs. 27.6 billion. Assets were Rs. 10.8 billion, down from Rs. 12.4 billion as at 31 March.
(FT)