NDB facilitates Sri Lankan corporates’ regional expansions
Tuesday, 4 March 2014 00:50
NDB started a new chapter in its history last December with the group’s Project & Infrastructure Financing Department and Investment Banking units working seamlessly to facilitate the regional expansion of the LTL Holdings group (LTL), one of Sri Lanka’s leading engineering conglomerates. LTL commissioned its first thermal power plant ‘Raj Lanka Power Company Ltd.’ in Bangladesh last month where NDB Group played a pivotal role in structuring, arranging and partly financing this bold venture by a Sri Lankan firm.
Due to the competitive bidding process, LTL had to work with very thin margins in making this project successful. NDB Group’s Investment Banking Units in Sri Lanka and Bangladesh, NDB Investment Bank and NDB Capital, structured an innovative product for fund raising in the Bangladeshi capital markets which ultimately reduced the cost of local currency borrowing for the project. The remainder of the project’s debt component was financed via a US dollar loan syndicated from the Sri Lankan banking sector with NDB committing $ 12 million. Both NDB Investment Bank and NDB Capital skilfully facilitated this financing arrangement despite the complications stemming from the dual jurisdictions and multiple financiers of the project.
LTL has already commenced work on their second power plant investment in Bangladesh and NDB is actively working towards being a significant partner in this project as well.
Commenting on the project, NDB CEO Rajendra Theagarajah stated: “NDB as the premier project financier in the country financed LTL’s first thermal power plant in Sapugaskanda in 1999. NDB is proud to partner with LTL financially for their first off-shore power plant and hope to be part of the group’s future endeavours. This is yet another step taken in NDB’s strategy to make its presence in overseas project financing.”
The CEO of NDB Group’s investment banking cluster, Vajira Kulatilaka stated: “I’m pleased with our Investment Banking teams both in Sri Lanka and Bangladesh, which successfully structured and executed a cross-border, multi-currency, multi-instrument syndicated funding facility which enhanced the financial viability of the project.”
He added: “When we started operations in Bangladesh, one of our main objectives was to facilitate off-shore expansions of Sri Lankan corporates. Today I’m delighted to say that we have been successful in achieving this goal.”
NDB Vice President/Head of Corporate Banking Buwaneka Perera said: “NDB Group gained immense experience by arranging, evaluating and funding this challenging overseas transaction. With the expertise gained in the areas of legal, technical, cross border regulatory requirements and country specific regulations, NDB Group is now well geared to facilitate overseas expansions of other Sri Lankan corporates.”