People’s Merchant Finance goes for another Rights Issue to support transformational journey

PMF Chairman Chandula Abeywickrema

PMF CEO Nalin Wijekoon

To further its success story and remain vigilant of meeting and when possible exceeding regulatory compliances, People Merchant Finance PLC (PMF) has announced its second rights issue within a span of less than a year. 

Operating in a highly regulated industry, PMF’s main focus is to meet the core capital requirements of Rs. 2.5 billion due in December 2021, as stipulated by the Monetary Board of the Central Bank of Sri Lanka (CBSL) under the Finance Business Act Direction No. 02 of 2017 issued on 23 February 2017. To meet this requirement, PMF is embarking on another rights issue worth Rs. 510 million from this issue of 78,445,500 shares at Rs. 6.50 per share open to all ordinary shareholders. The rights issue has been approved by the regulatory authority and is currently awaiting approval from the Colombo Stock Exchange (CSE). 

Funds from this rights issue will be utilised to mobilise and execute its five-year transformational strategic plan. Specifically, funds will be diverted towards technological advancements, strengthening the product portfolio, expanding geographical presence, further strengthening its core management team, and enhancing overall customer experience.

The revival and revitalisation of PMF which began in May 2019 has shown remarkable results to date. The company has thrived on a turnaround strategy and has delivered its promises despite the many prevailing challenges in the operating environment. The restructuring efforts of PMF continue undaunted, with the abundant support of Sterling Capital Investments Ltd. (SCIL), loyal customers, and the dedication of management and employees.

The success seen in a short span of time remains the underlying motivator for the Company to remain true to its transformational journey. “Success has been achieved with the courage our convictions,” said PMF Chairman Chandula Abeywickrema. 

He strongly believes that the commitment of the shareholders, the Board of Directors, and the newly strengthened corporate management team and all PMF employees will ensure the Company’s future growth and success. 

“PMF is positioning itself to make the most of operating in this pandemic inundated market, but we are also slowly and steadily repositioning ourselves to capitalise on emerging opportunities, especially those which will arise in the post pandemic era,” he states. “We have reaped the initial rewards already. There is no doubt that if we continue to deliver as promised, the company will achieve its full potential and continue to appropriately reward all stakeholders in a sustainable way in the future,” Abeywickrema added. 

The underlying reasons for PMF’s transformational journey was to bring to the forefront the true potential of the company and become a strong market contender in Sri Lanka’s financial industry. Accordingly, the company sought changes to internal processes and operations, enhanced its market presence by enriching customer services and offering customers’ financial products to meet their requirements when they need it, and focused on meeting regulatory compliances. PMF also actively pursued measures to control costs to maximise value to customers, while monitoring external market development to perceptively adapt to new trends and counteract economic changes.

These efforts resulted in the company earning a profit before income tax and tax on financial services of Rs. 100 million for the financial year ended 2020/21, after a span of eight years. Furthermore, the acceptance and the positive uptake of the new strategic changes by the company’s customers amidst the many challenging in operating environment reiterated their confidence in the company and its management. The successful conclusion of PMF’s right issue in March 2021 proved this fact, and is also credited to the realisation of the company’s turnaround journey.

Today the company has delivered on many promises made. PMF ensured their employees were rewarded and recognised for their contribution in ensuring corporate success. “For the first time in many years, our employees received bonuses. We also gave salary increments while facing many challenges; and promoted valued staff members in recognition of their services to the company,” said PMF’s Chief Executive Officer Nalin Wijekoon.  Value was also created for shareholders, customers, and other partners. 

PMF is resolute to serving the financial needs of the middle-level market consisting of small and medium sized business entities, commercial enterprises, emerging entrepreneurs, and retail clientele. The company is investing today for lucrative long-term success. Accordingly, its newest product – the Entrepreneurship Loan – will be launched this month. This product is aimed at Sri Lanka’s emerging entrepreneurs and supports the national initiative to encourage local business operations to drive economic growth. 

Furthermore, to enhance customer experience and gain location-related benefits, the company is all set to move to its new headquarters in Colombo which will double as the Colombo corporate branch this month.