UDA’s new bond-for-bond to settle earlier debenture
View(s):The Government is issuing another Rs.10 billion bond issue to repay local and foreign investors who subscribed to the earlier Urban Development Authority’s (UDA) 5-year, Treasury-backed debenture which matured earlier this month, a senior cabinet minister disclosed.
Minister of Megapolis and Western Development Patali Champika Ranawaka told the Business Times that the UDA will be transformed to a commercial unit to make it a viable profit making entity and necessary arrangements are being made to repay investors soon.
He added that a sum of Rs. 39 billion is urgently needed to complete the 17,000 houses programme and the bond will be issued to find this money as well.
The previous bond was issued to fund another housing project, five years ago which drew private investors. Earlier this year, the Securities and Exchange Commission (SEC) halted the UDA’s Rs. 10 billion debenture issue and called for its audited accounts of 2012 and 2013.
The Ports Authority, Bank of Ceylon, Sri Lanka Insurance Corporation, the National Insurance Trust Fund, Seylan Bank, Commercial Bank, Sampath Bank and HNB Assurance were among the local parties who invested in UDA’s 2010 Rs.10 billion debentures. CITICORP Investment Bank Singapore Ltd had purchased the entire amount of Rs. 3 billion allocated for foreign investors.
The UDA has announced at that time that the money will be used to build 65,000 housing units for unauthorised dwellers in 800 acres of high value state land in Colombo city. The UDA has now been directed to rectify this issue and clear all bottlenecks to raise necessary funds for the housing programme, he pointed out.
(Bandula)