Central Bank seeking another US$100 m to resurrect ETIFL
The Central Bank is looking out for another US$100 million financial infusion from a prospective investor to bail out the defunct Edirisinghe Trust Investment Finance Ltd (ETIFL), a licensed finance company, in an effort to complete the repayment of all the monies of disgruntled depositors.
This sum of $100 million is needed to completely resurrect the failed FTIFL and meet all its liabilities of the firm in addition to the $75 million pledged earlier by a Singaporean investor, Central Bank Governor, Dr. Indrajit Coomaraswamy told a media conference in Colombo on Friday.
The directors of EAP Group have been given time till September 30 to bring $100 million in new capital or investors and settle the current balance of $32 million by next month.
If this money is not raised within a short period, then the CB has no alternative other than liquidating the balance assets of the company, he revealed.
Small depositors who have deposited up to Rs.600,000 could be repaid if the firm is liquidated but assets and deposit insurance may cover only up to 65 to 70 per cent of all liabilities.
The total deposit base of ETI Finance Ltd is in the region of Rs.33 billion. Out of $75 million, the buyer has transferred $32 million and ETIFL has received its Sri Lankan rupee value of Rs. 5,017.6 million, he said.
Some 10 per cent of deposit liabilities which amount to approximately Rs. 3,350 million and the accrued interests of Rs. 1,400 million (approximately) as at end May 2018 has already been paid to depositors using the sales proceeds received, he disclosed.
The payment process began on June 5. ETIFL has also been instructed to pay a further 10 per cent of deposit liabilities on receipt of $11 million the balance part of the sale proceeds ($43 million), he added.
The investor has agreed to pay $11 million by the end of this month, he added.
Foreign investor consortium, led by the Singapore-registered Blue Summit Capital Management Ltd., has signed a Sales and Purchase Agreement with the Edirisinghe family to divest 100 per cent of EAP Films and Theatres and 100 per cent of Swarnamahal Jewellers, as well as 40 per cent of EAP Broadcasting, which owns a television channel and radio channels.
A Sri Lankan entity Ben Holdings Ltd has also joined the foreign consortium to fulfil all the necessary obligations in taking over all these three EAP companies enabling the EAP Group owners to infuse part of the money needed to pay ETIFL depositors, Deputy Governor C.J.P. Siriwardana said.
He expressed the belief that the Singapore investor will bring the balance $32 million to close the deal of acquiring companies of the EAP Group.
The Singapore company with the backing Ben Holdings Ltd, the local investor, will gain full control of the EAP group’s television and radio stations (Swarnavahini, Shree FM, Ranone FM and E FM). At present, only 40 per cent of shares has been pledged, it has been revealed.
But the ETIFL will be managed under the supervision of the Central Bank, he said.
The Central Bank has requested all depositors to be patient until the finalisation of the action plan with regard to ETIFL and to cooperate with the bank-appointed management panel of ETIFL to implement the payment plan.