Sale of finance company boosts Prime Group’s core biz; looks for further diversification

Prime Group Chairman Premalal Brahmanage

With the infusion of Rs. 2.1 billion via the sale of shares in its financing company, Prime Lands said yesterday it was looking to further consolidate and strengthen the presence and equity of its core business whilst looking to

diversify into other business sectors.

The move apart from strengthening Prime Lands’ cash flow position will add value to and uplift the Sri Lankan economy as well, the company added.

“With the sale of its majority stake, our intention is to build and advance our elite position in the upper echelons of the country’s real estate sector as a pioneer and leader delivering exceptional living experiences,” Prime Group Chairman Premalal Brahmanage said.

“This inflow of cash will drive and further fortify our financial stability and provide impetus to our plans of diversification to novel business sectors while continuing to grow as the most trusted real estate leader in the country,” he added.

In a strategic move to focus more on its core business vertical, leading real estate giant Prime Lands Ltd., a subsidiary of pioneering Sri Lankan real estate magnate Prime Group, entered into a contractual agreement with HNB Finance PLC on Monday selling a controlling stake of Prime Finance PLC amounting to 87.27% of the company. Prime Group owns 39% stake in HNB Finance PLC.

Prime Finance enjoys a top tier position in the country’s financial sector, making this acquisition a powerful coalition of two category A players within the industry.

The move follows a consolidation plan issued by the Central Bank of Ceylon (CBSL) to foster macroeconomic and financial systems stability by facilitating consolidation within the financial sector. This plan encourages mergers and acquisitions within as well as new capital infusions to the sector, in order to facilitate the creation of 25 strong Non-Bank Financial Institutions (NBFIs) in line with the CBSL’s medium-term targets.

“We take pride in what the Prime Finance team has built and accomplished over the years, especially in establishing a robust portfolio of personal and business finance solutions,” Prime Group Chairman Brahmanage said.

This merger will bring a strong synergy between the two entities and existing and future customers can expect to benefit from an innovative portfolio of products more efficiently and easily accessible services through a combined branch network, strengthened financial stability and fortified security for deposit holders, low-cost findings, as well as access to real estate loan products at attractive rates.

Brahmanage also said Prime Group is an experienced player in the Capital Market having previously driven the acquisition of a listed company, three right issues, as well as a successful IPO.

Prime Group is Sri Lanka’s largest and most diverse real estate developer with a flourishing history of 26 years of excellence. Being Sri Lanka’s only ICRA [A-] Stable rated real estate company proving its financial stability reaffirmed for two years. To date, Prime Group claims a portfolio of 30 individual housing projects, land projects spread across 18 districts in the country and 40 apartment projects located in Colombo and the suburbs.