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Monday, 8 May 2017 00:58 - - {{hitsCtrl.values.hits}}
Richard Pieris Finance Chairman J. F. Fernandopulle (left) shakes hands with K.A.B. Wijayasundara. Others from left are Directors D. P. J. Hewavitharana, C. P. Abeywickrema, W. J. Viville Perera and CEO/Executive Director M. M. Jabir
Richard Pieris Finance Ltd. (RPFL), a subsidiary of and the sole finance company within Richard Pieris Group, one of the largest conglomerates in the country, last week announced the finalisation of their merger with Chilaw Finance PLC (CFP).
The amalgamation, which was briefly mentioned in December last year in a filing by the Colombo Stock Exchange, will be worth an estimated Rs. 16 billion over the next three years to RPFL, and will see CFP cease to exist.
The merger has been over three years in the making after it was initiated under the Central Bank Financial Sector Consolidation Plan of the previous regime in 2014. Even though the scheme was discontinued by the present government in favour of voluntary mergers and amalgamations, the then budding RPFL had already purchased over 80% of CFP shares, obliging them to present a mandatory offer to purchase the remaining shares of CFP as per the Company Takeovers and Mergers Code.
The deal is a major boon for RPFL, which is the youngest finance company in the country at a shade over four years, as it is estimated they will double their customer base to nearly 10,000, grow pre-tax profit by Rs. 1.6 billion, and increase their asset base to nearly Rs. 30 billion (Rs. 12.5 billion at present) in the next year three years, revealed RPFL CEO and Executive Director K.M.M. Jabir.
“Richard Pieris Group has been in the country over eight decades; the asset base of the group is over Rs. 47 billion. The strength of the group and the backing of the group for the finance company are vital from an investor or customer perspective. That is why we are here today proudly. We expect soon after the merger to reach a 25 branch network within the next two years and to achieve a Rs. 1.6 billion Profit before tax in 2020; and also to reach an asset base of Rs. 30 billion. We have developed a very solid business plan to drive this company toward that,” he added.
Prior to the merger, CFP was a company with a proud 35-year history with branches in Kuliyapitiya, Kurunegala, Chilaw and Dankotuwa, which Jabir referred to as ‘virtually the best of towns in the North Western Province’. RPFL hopes this network extension will provide both the company and their burgeoning client base easy access and enhanced business opportunities across the country.
“Additionally, our combined talent and capital base will allow us to better serve both RPFL and Chilaw Finance customers through newer products and services, improved technology and more locations,” explained Jabir.
The Richard Pieris Group is primarily known for their ‘Arpico’ chain of supermarkets and this is also a key tenet in RPFL’s business plan going forward. The newly formed financial behemoth hopes to tap into its synergies with Arpico to provide services unavailable to competing financial companies.
“After the war the industry has become highly competitive. To set ourselves apart we are going to introduce new products such as Supplier Financing and Entrepreneur Financing. With these customers will have a ready market within the group. Most manufacturers or producers usually have to think about the marketing, but here the marketing problem is not there. Nobody else has that option,” noted Jabir.
APFL Chairman Felix Fernandopulle added: “At its core, the decision to join RPFL and Chilaw Finance Plc was based upon a remarkably similar mission of providing unparalleled customer service and superior financial products to our loyal customers. The Board of Directors and I are extremely energised by the potential that exists in the affiliation with Chilaw Finance for our shareholders, customers and employees.” (MB)
