Softlogic Finance in Rs.1.4 bln debenture issue for SME funding
Softlogic Finance PLC announced a debenture issue of Rs.1.4 billion, a stock exchange filing stated on Wednesday.
The company stated that it would be issuing 14 million debentures at Rs.100 each with the public issue opening on August 21.
Speaking with the Business Times, Softlogic Finance Managing Director Ifthikar Ahamed said the debenture issue would ensure that the company would be able to access funding from banks, insurance companies and other fund managers.
He noted that Softlogic Finance was involved in raising funds through customer deposits and borrowing and in latter regard they would be cashing in through loans and debenture issues.
The Rs.1.4 billion debenture issue announced is a five year instrument rated AAA by RAM Ratings with Guarantco, a Development Finance Institution (DFI) that has as its ultimate shareholder the UK government, acting as guarantors for the instrument, Mr. Ahamed said.
Softlogic Finance is focused on the SME sector and the company has an annual plan to raise US$10 million as part of a funding plan for the company, the managing director pointed out.
He noted that the company in raising such funds would do so through customer deposits and borrowing that would assist the company to raise funds for further SME lending activities, for which they have a presence in most parts of the country except the East.
This is the company’s second DFI transaction, the first of which was carried out last year through a foreign currency loan obtained through FMO, a Netherlands based company which has interests by the Dutch government.
The first loan has a five year repayment period and the first payment has already been made, Mr. Ahamed said for the $10 million loan obtained.
He said that such funding was carried out in a bid to ensure the company would be able to generate a growth of 20-25 per cent.
Softlogic Finance is already looking at two DFIs interested in granting loans to the company as a foreign currency loans for the next couple of years. However, Mr. Ahamed did not identify the companies at this stage.