RAM places Nanda Investments and Finance’s ratings on positive watch

Tuesday, 30 July 2013 00:35 - - {{hitsCtrl.values.hits}}

RAM Ratings Lanka has placed Nanda Investments and Finance PLC’s respective long- and short-term financial institutions ratings of BB- and NP on Rating Watch, with a positive outlook. The Rating Watch was triggered by the recent acquisition of Nanda by BRAC Lanka Investments Pvt Ltd., a subsidiary of BRAC Bangladesh (BRAC) a leading player in microfinance with a global presence in 11 countries, and LOLC Micro Investments (Pvt) Ltd. (LOMI), a subsidiary of Lanka ORIX Leasing Company PLC (LOLC). On 27 June 2013, BRAC Lanka Investments (Pvt) Ltd., together with LOMI acquired Nanda with respective stakes of 56.6% and 33.4%. Nanda’s ratings had been pressured by its miniscule size, lack of clear strategic direction and weak franchise which had challenged its competitive position in the Licensed Finance Company (LFC) industry. However, given the change in its ownership, it is envisaged that the company’s future growth strategies would be guided by the new shareholders’ expertise in the financial services sector. We will continue to monitor developments in this regard and will take appropriate rating action in due course. RAM Rating Lanka’s Rating Watch highlights a possible change in rating. It focuses on identifiable events such as mergers, acquisitions, regulatory changes and operational developments that place a rating under special surveillance by RAM Ratings Lanka. Appearance on RAM Rating Lanka’s Rating Watch, however, does not inevitably mean that the existing rating will be changed. It only means that a rating is under evaluation by RAM Ratings Lanka and a final affirmation is expected to be announced. A “positive” outlook indicates that a rating may be raised while a “negative” outlook indicates that a rating may be lowered. A “developing” outlook refers to those unusual situations in which future events are so unclear that the rating may potentially be raised or lowered.

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