LB Finance buys 65% stake of Multi Finance for Rs. 400 m from Fairway

• CBSL sanctioned move as part of consolidation in NBFI sector

Industry giant LB Finance PLC on Wednesday acquired 65% stake in Multi Finance PLC for Rs. 400 million.

It bought 41.11 million shares or 64.62% stake with 28.78 million shares at Rs. 9.70 each and 12.32 million shares at Rs. 9.80 each. The loss making Multi Finance’s net asset value per share is Rs. 7.12.

LB Finance will make a mandatory offer under the SEC’s Takeovers and Mergers Code. Multi Finance has a public float of 35% with 904 shareholders.

The acquisition is part of the Central Bank facilitated consolidation within the Non-Bank Financial Institutions (NBFIs) sector.

The transaction was structured and executed by Acuity Stockbrokers whilst the stake belonged to Fairway Holdings which was pledged to HNB.

Multi Finance as at 31 December 2021 held assets worth Rs. 773.2 million whilst liabilities were Rs. 320 million. It was carrying an accumulated loss of Rs. 462 million.

The impending acquisition was first announced in late January and LB Finance said it will amalgamate the two companies once the current legal impediments against such a move are resolved.

LB Finance had assets worth Rs. 154.6 billion as at 31 December 2021, up from Rs. 140.5 billion a year earlier. Retained earnings amounted to Rs. 22.5 billion. Business leader Dhammika Perera controlled Vallibel One PLC owns 51.7% of LB Finance along with related party Royal Ceramics holds 26% stake. Young business leader Eshana De Silva who owns Esna Holdings has 10% stake as well.