The Finance & Guarantee (F&G) Group of Ceylinco Consolidated is to be restructured under a Management Council set up in collaboration with Merchant Bank of Sri Lanka (MBSL) aimed at tackling the current financial crisis of the company.
A repayment plan for depositors and the investors of the Finance & Guarantee Company Ltd (Registered Finance Company), F&G Real Estate Company Ltd (unregisted) and F&G Property Developers Ltd (unregistered) of the F&G Group was announced by MBSL Chairman Janaka Ratnayake at a media conference on Tuesday.
The Sunday Times FT reliably learns that the F&G Company Ltd would be paying Rs.10 million a month to the MBSL as consultancy charges, but Mr. Ratnayake declined to divulge the amount.
At present F&G has more than 7000 depositors with a deposit base of Rs 13 billion with the matured deposits amounting to only Rs 300 million. Around Rs.1.5 billion was spent from its mobilized funds owing to increased withdrawals. This was the main reason for the current financial crisis, Chairman, F&G Group, Mervyn Jayasinghe said, while apologising to customers and investors of the company for the mistakes and mismanagement of the Board of Directors of the Group.
Mr Ratnayake told The Sunday Times FT that they will enforce a restructuring plan and provide consultancy services to the F&G Group to weather the economic storm while strictly adhering to regulator requirements. The MBSL has signed a MoU with the F&G Group to set up the Management Council with the consent of the Central Bank.
He assured that the safety of the money of F&G depositors will be guaranteed as all three companies F&G Co Ltd, F&G Property Developers (Pvt) Ltd and F&G Real Estate Co Ltd have a sound asset base. “F&G Group liabilities are approximately Rs.12, 879 million according to the book value and the total asset value is recorded as Rs.13, 487 million,” he said. He attributed the present financial crisis in the private financial institutions mainly due to depositors seeking high interest rates, irresponsible finance companies without proper accountability and the regulators not properly monitoring financial institutions. He disclosed that the restructuring plan will be executed within two weeks and urged depositors and investors to be patient till then.
He disclosed that MBSL was also in talks with the regulator to manage and rehabilitate Ceylinco Savings Bank and Asian Finance Company – both part of the island's troubled Ceylinco group.
A separate repayment plan is to be implemented for depositors of the three subsidiaries of the F&G Group. According to this, at F&G Real Estate, investors up to Rs.500,000 will be repaid at 80% of their funds at maturity and 70% of their funds on a monthly basis. Investors up to Rs.250,000 will be paid 60% of their fund value ranging from one month to two years under the repayment plan of F&G Property Developers Ltd. He noted that large scale investors could be repaid immediately with their remaining 40% if F&G gets the opportunity to sell two of their large real estate projects which are at Negombo and Thalahena.
Further the investors who have invested above Rs.500,000 and Rs.250,000 at F&G Real Estate and F&G Property Developers Ltd. will be given transferred properties against the deposit value (initially limited to 80% and 60% of deposit liability at F&G Real Estate and F&G Property Developers Ltd, respectively) at the time of disposing assets.
In addition a letter of comfort will be issued for the balance capital amount which will be settled after one year if the F&G Property Developers Ltd. successfully divests its long term investment in Fingara Town and Country Club and Fingara Cricket Academy. |
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