Asia Asset Finance successfully raises Rs. 2 b during Q2 2021/22

Director and CEO Rajiv Gunawardena

AGM - Treasury Praveen Peiris

Asia Asset Finance PLC has successfully raised Rs. 1 billion recently for the last quarter from the market through a listed debenture issue, further consolidating its stellar financial performance during the present challenging and volatile situation. This is the second successful Debenture Issue by the company. 

Both Debenture Issues were oversubscribed reflecting the trust and the confidence placed on the company by the stakeholders. Further, the recent Preference share issue too was oversubscribed as a testimony of the investor confidence and trust built upon the company.

The company is poised to grow its asset base and the Debenture Issue will support the growth process and the preference issue meets the requirement for additional capital requirements. The funding activities of AAF is further diversified with the introduction of its successful preference share issue.  The funding portfolio now consists of Fixed Deposits, Preference Shares, Debentures, Securitisations and Bank Borrowings. The majority of funding was from Debentures and Preference shares amounting to Rs 1.4 Billion approximately and the remainder from Securitisations and Bank Borrowings during the quarter.

The strong governance framework backed by a robust business plan for post-COVID have driven the company operations into a very stable position with over 80% of our portfolio being fully secured through value appreciating assets hence, the company is poised to serve its customers with greater efficiency and confidence, Chief Executive Officer Rajiv Gunawardena said.

The company had an initial issue of five million debentures by way of issuing Secured (Asset Backed), Listed, Redeemable, Rated three-year (2021/2024) and five-year (2021/2026) debentures at a par value of Rs. 100 each.

Commenting on the successful debenture issue, Head of Treasury Praveen Peiris stated, “The success of this debenture issue is a testament to the trust that the investors have in the strength and stability of Asia Asset as well as its capabilities as a leading finance company. It has enabled Asia Asset Finance to issue up to a further five million of said Debentures at the discretion of the company to raise Rs. 1 billion which was made possible with the support given by the two leading giants in the investment banking sector, who were the Joint Managers to the issue.”

The Joint Managers to the last Debenture Issue were Capital Alliance Partners Ltd. and First Capital Ltd.

Asia Asset Finance is known for its dynamic professionalism and is one of the most trustworthy Non-Bank Financial Institutions in the country. The institution provides its corporate and other clients with a wide range of financial solutions drawing attention to the stability of the organisation.

Being a BBB+ company, AAF has gained a stable outlook with resilience, overcoming growth headwinds in the Covid-19 environment, leading credit rating agency ICRA Lanka Ltd. affirmed.

As of 30 September 2021, total assets amounted to Rs. 17.7 billion, up by 15.36% and liabilities grew by 14.55% to Rs. 15 billion, when compared to 31 March 2021. Muthoot Finance Ltd. owns a 73% stake of Asia Asset Finance. Muthoot Finance currently continues to play an active role in developing and grooming Asia Asset Finance to become one of the most stable financial institutions in Sri Lanka. Similarly, Muthoot Finance is one of the largest gold financing companies in the world with a legacy of over 70 years.