LOLC to list Rs. 1.5 b worth of debentures

Lanka Orix Leasing Company Ltd announced that the Colombo Stock Exchange (CSE) had approved an application by the company to list 7.5 million debentures. The debentures will be listed through an introduction and will be granted a listing on or before the third market day upon receipt of a declaration by the company.

The company will be issuing unsecured listed debentures upto a value of Rs. 1.5 billion. The managers to the issue will be First Capital Limited, while the trustee will be Bank of Ceylon. These Senior, Unsecured, Redeemable, Rated Debentures will be for tenures of four years and five years and will carry semi annual interest coupons of 11.70 per cent and 11.90 per cent respectively.

These debentures have been assigned a national long term rating of A- (lka) by Fitch Ratings (Lanka) Ltd. The rating of A- indicates LOLC’s high credit quality and strong payment capacity of financial commitments.

The funds raised through the debenture will be utilised to retire part of the company’s short-term debt, thereby better aligning the maturity profile of LOLC’s assets and liabilities and further strengthening the balance sheet structure of the company.

In addition to the current issue, LOLC is also planning to issue listed debentures, open for international investors as well.

This will enable LOLC to access a wider pool of funds, taking into consideration the strong relationship that LOLC maintains with its foreign funding partners and investment funds. LOLC has had track record investment relationships with several multilateral and bilateral funding partners who have partnered LOLC with long term funding, supporting the SME and micro lending of the group.

The Group’s total lending portfolio, consisting of leases, loans, hire purchases, factoring and pawning, grew by 67 per cent, from Rs. 35.1 billion to Rs. 58.4 billion during the financial year ended March 2011. The LOLC Group reported a Profit Before Tax of Rs. 8.3 billion for the year ended 31st march 2011, with a 60 per cent contribution to the groups profits coming from the financial services sector.

The company released its first quarter earnings for the Financial Year 2012 revealing Gross Revenue increased 54 per cent to Rs.9.1 billion while Profit After Tax grew 111 per cent to Rs. 1.8 billion. The group’s shares closed at Rs. 89 on Tuesday.    (DG)