LOLC’s Rs. 5 b debentures snapped up

Wednesday, 19 November 2014 00:27 -     - {{hitsCtrl.values.hits}}

Lanka Orix Leasing Company Plc’s Rs. 5 billion debenture issue was closed yesterday following an oversubscription. The company said the issue of five million rated, senior, unsecured, redeemable debentures of Rs. 100 each was oversubscribed on its official opening day yesterday. Basis of allotment and final applications will be made known later. The proceeds of the issue will be utilized to retire short term debt (borrowed at an average of 10%). The short term debt selected are short term loans and commercial paper, due to the high cost of servicing same. Rated A- by ICRA Lanka Ltd., the debentures offered a fixed interest rate of 9.00%p.a. payable quarterly (AER – 9.31%). LOLC Group last week announced it has recorded 118% growth in PBT for the six months ended September, reaching a strong profit signature of Rs. 3.7 b compared with Rs. 1.7 b reported for the same period last year. The main contributor to this growth in the profits comes from LOLC’s core business, financial services, where all three regulated companies recorded excellent performance for the first six months of 2014. The trading sector too contributed to strong profitability while the other sectors and equity accounted investments yielded higher returns, further strengthening Group performance.