Vallibel Finance raises Rs. 225 m from parent via five-year debentures

Vallibel Finance Plc has obtained approval from the Central Bank and Securities and Exchange Commission to issue 225,000 unsecured subordinated redeemable debentures of Rs. 1,000 each to raise Rs. 225 million.

The fixed rate debenture will carry an interest rate of 13% per annum payable annually with a maturity period of five years to Valibel One, which is the parent of Vallibel Investments Pvt. Ltd., which in turn holds 72.87% of Vallibel Finance.

Funds from the debenture issue will see the expansion of the capital base of the finance company in keeping with the capital adequacy requirements required to be maintained by the Central Bank. Valibel Finance saw income grow 90% to Rs. 514.4 million as profits rose 149% to Rs. 108 million in the six months ending September 2011.

Vallibel One is the first holding company of businessman Dhammika Perera consolidating some of his personal and controlling and strategic stakes in Royal Ceramics (51%), LB Finance (51%) and Sampath Bank (15%) as well as an upcoming luxury resort in Negombo.

Vallibel One also has interests in renewable energy projects and has acquired a 51% stake in Lewis Brown and Company, the holding entity of Delmege Forsyth and Company Ltd. and its Group of Companies, whilst connected parties acquired the balance. In July 2011 it also acquired a 50% stake in Orit Apparels Ltd., for $ 7.26 million.

Valiibel finance shares closed 50 cents down at Rs. 43.10 when 30,700 shares traded on Tuesday.