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Monday, 5 December 2022 01:31 - - {{hitsCtrl.values.hits}}
By Nisthar Cassim
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Dr. Binod K. Choudhary
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Nepali entrepreneur, politician, and philanthropist Dr. Binod K. Choudhary said on Friday that his CG Corp Global’s acquisition of controlling stake in Union Bank of Colombo (UBC) reaffirms its commitment to Sri Lanka despite most challenging times.
UBC said on Thursday that CG Capital Partners Global Ltd., based in Singapore has entered into a share sale and purchase agreement with TPG Asia VI SF Ltd., to buy the latter’s Culture Financial Holdings Ltd., which in turn owns 71% stake in Union Bank of Colombo.
The transaction is subject to several conditions’ precedent, including regulatory approvals, according to the filing by UBC to the CSE.
“The acquisition reaffirms our continued commitment in Sri Lanka despite challenging times,” said Choudhary who figures in The Forbes magazine’s list as Nepal’s sole billionaire. CG Corp Global is Nepal’s only multinational company and has over 160 companies with over 15,000 employees in 32 countries. His Group via joint ventures has interests in Taj Lanka Hotels PLC and Jetwing Symphony PLC.
“Sri Lanka is going through tough times amidst foreign exchange and reserves crisis. However, we decided to take a plunge in Sri Lanka in these difficult times. We know it is not going to be easy but tough. That is the essence of our relationship with Sri Lanka,” Choudhary told the Daily FT.
“When time gets tough the tougher gets going,” he quipped adding the latest investment reaffirms his and CG Corp Global’s strong trust and confidence in Sri Lanka.
Recalling his first investment in Taj Samudra Colombo in 2001 amidst the then raging North-East conflict, CG Corp Global and Choudhary Group Chairman Choudhary said: “We stood by Sri Lanka then too as we saw the future potential.” He noted that the investment then was appreciated by the Government at that time, the private sector and people of Sri Lanka at large.
CG is also a top player in Nepal’s financial services industry including commercial and investment banking, insurance and number one principal agent of Western Union in Nepal. CG Corp Global has the controlling stake in Nabil Bank Ltd., the nation’s first private commercial bank. Nabil has been operating its business since July 1984.
Apart from financial services, CG Corp Global whose origins stretch back to 1935 has extensive interests in a wide range of businesses including food and beverage, hospitality (141 hotels and resorts in 12 countries with over 8,399 keys), cement, electronics, infrastructure, packaging, communications, real estate, and education.
Post announcement of CG Corp Global deal, UBOC share on Thursday gained by one rupee or 13.3% to close at Rs. 8.50 but closed at Rs. 8.10 on Friday.
The total Assets of the UBC amounts to Rs. 136.7 billion as at 30 September 2022, up by 15% from end of FY21. The Union Bank Group, consisting of UB Finance Company Ltd. and National Asset Management Ltd. has assets worth Rs. 144 billion, up 16%.
The Bank continued to maintain a strong capital adequacy position, well above the regulatory requirements and the Bank’s Total Capital Ratio was 17.02% as of 30 September. The public float of UBOC is 29% held by 29,000 shareholders as at 30 September 2022.
In the 3Q of FY22 Union Bank said it posted improved core banking performance amidst challenges. It recorded an enhanced core banking performance with an overall income of Rs. 5,343 million for the third quarter which is an increase of 109% over the comparative period. For the nine months ended 30 September, the Bank’s overall income increased by 55% to Rs. 12,769 million.
Results from operating activities for the quarter stood at Rs. 298 million and the Bank’s Profit before Tax (PBT) including its equity accounted share of subsidiaries for the third quarter was Rs. 93 million and the Bank’s Profit after Tax (PAT) was Rs. 74 million. Group recorded a PBT amounting to Rs. 130 million for the quarter and Rs. 525 million for the nine months ended 30 September.
