Financial Times

Asia Cap's Rs 600 mln bid for Pramuka
By Duruthu Edirimuni
A consortium led by the Asia Capital Group and National Wealth Corporation bidding to revive the failed Pramuka Savings and Development Bank last week submitted an amended proposal raising its original proposed investment by Rs 100 million to Rs. 600 million.

The Monetary Board reviewed the initial proposal on Wednesday and requested clarification on some numbers and assumptions stated in their proposal to revive the defunct Pramuka Bank, an authoritative source told The Sunday Times FT.

The earlier proposal presented by the syndicate saw Asia Capital pumping Rs. 250 million whereas now it has increased to Rs. 300 million. The Richard Peiris group, architect Surath Wickremasinghe and some commercial banks like HNB and the National Savings Bank are investing the balance proportionately.

Under the bid offer, it is proposed to rename PSDB as Sathosa Bank and set up a broad branch network using Sathosas retail outlets while tapping the small and medium markets. Investors are seeking a commercial banking licence together with several regulatory requirements such as relaxing the 10 percent Statutory Reserve Requirement and giving the bank parate execution powers, the source said.

The restructuring plan proposes to convert Rs. 1.2 billion of depositors funds as non-voting equity. The Sunday Times FT learns that Central Bank authorities were due to submit the proposal together with their views before a Monetary Board meeting on Friday evening. With January 21 being the deadline in which the suspension on the banks licence ends, the authorities are expected to come up with a restructuring plan for Pramuka before this deadline. The authorities have also been considering two other offers including one from the depositors to revive the bank.

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