Kerala-based Muthoot Finance acquires controlling stake of Asia Asset Finance
Muthoot Finance Ltd, one of the largest gold financing companies operating on a global scale whose head office is based in Kerala, India, made its first investment in the Sri Lankan market with the acquisition of a controlling stake of Asia Asset Finance PLC, a top official of the company said.
In August, Muthoot acquired 29.98 per cent equity stake in Asia Asset Finance for US$2.1 million from Asia Capital PLC, a significant shareholder of Asia Asset Finance, through a Colombo Stock Exchange (CSE) transaction.
It has now acquired over 240 million more equity shares in Asia Asset Finance at a price of Rs. 1.60 per share for Rs. 384 million as part of a Rights Issue. With this, the total shareholding of Muthoot in Asia Asset Finance has risen to 44.32 per cent, Rajiv Gunawardena – Chief Executive Officer of the company revealed.
Muthoot Finance currently operates through over 4,400 branches in India, offering services in gold loans, money transfers, wealth management services, foreign exchange and many other diversified services such as travel and tourism. With strong investments in the UK, US, and the UAE, the company now believes that the economy of Sri Lanka is primed for investment by its stability and strategic positioning.
After the successful completion of the Rights Issue, Muthoot Finance is now the major shareholder of Asia Asset Finance, primarily offering finance services for personal and corporate requirements. The company has a widespread branch network throughout the country in Colombo, Negombo, Gampaha, Wennappuwa, Batticaloa, Jaffna, Kilinochchi, Moratuwa, Kalutara, Kurunegala and Galle.
Mr. Gunawardena said “The management of Asia Asset Finance strongly believes that the relationship formed with Muthoot Finance will take the company to greater heights and help achieve new milestones. With the strategies discussed with Muthoot Finance, plans are already in the making to make Asia Asset Finance one of the top finance companies in Sri Lanka,” he added.