LOLC acquires Commercial Leasing

By Duruthu Edirimuni Chandrasekera

The Lanka Orix Leasing Company (LOLC) Ltd on Friday took control of Commercial Leasing Company Ltd (CLCL), acquiring a 66.68 percent stake in the company in a bid to expand LOLC's scale of business.

In the stockmarket, Chemanex Ltd, (whose core business is in chemicals and paints) sold 36.68 percent, while Commercial Bank sold 30 percent – both at Rs.93.50 per share. When asked what business sense CLCL (which is a stand alone firm without a clear funding base) brings to LOLC, Kapila Jayawardena, Group Managing Director / CEO of LOLC said, "It makes a lot of sense.

We are in a scale game. This acquisition makes us one of the largest non financial service companies in the country.” He added that CLCL has a lot of synergies with LOLC. "They have a strong factoring and an insurance operation like us. We are bringing in more customers to our fold," he said.

He said that LOLC will be issuing a mandatory offer to Singer Sri Lanka which has 30 percent. When asked whether the acquisition was done at a discounted price, Jayawardena said, "It is the negotiating power we bring to the table." As at Thursday, the share traded at Rs.103.