An initial capital infusion of Rs. 3 billion will be made by the directors of the proposed holding company that is being proposed to settle the money owed to thousands of depositors of the failed Golden Key (GK) Credit Card Co.
In the first phase of the repayment plan, 30% of the agreed upon security deposit liability will be paid in 2011 with the balance 70% in equal amounts in 2012, 2013, and 2014. Of the 30% payable in 2011, 15% will be paid on or before June 30 and the balance 15% on or before December 31, subject to obtaining the necessary approvals from the relevant authorities, according to the proposal for the settlement of security deposits of GK depositors, a copy of which was obtained by the Business Times.
Interest at 6% per annum will be applicable on the balance outstanding with effect from January 1, 2012,
According to this proposal only 25% of the security deposit will be paid to depositors who opened an account in 2004 or before that year. Only a maximum of 37% of the capital will be paid to depositors who opened accounts in 2005, 59% for those who opened accounts in 2005, 59% in 2006, 79% in 2007 and 100% in 2008. The security deposit placed by a customer is treated as a 10-year loan given by the customer to the company. The rebate paid and withdrawn monthly is treated as the payment of a loan installment by the company comprising capital and interest.
Under this proposal, the companies to be listed on the Colombo Stock Exchange or where joint ventures would be established would be the Golden Key Eye & ENT hospital which will be converted into a multi- specialty hospital, the project at Kirimandala Mawatha which could be developed into a hospital or city hotel, the teak plantation at Galewela and the GK IT cluster.
The funds for the implementation of the repayment plan would be generated from the realization of assets of the GK group, disposal of assets of the Ceylinco group and others as per existing orders of the Supreme Court, and generation of money by the public listing /private placements/forming of joint ventures, by certain GK group companies. The value of immovable property of the GK group is around Rs.7.72 billion, the value of other assets is Rs. 2.8 billion and a sum of Rs. 900 million will be raised from the sale of Ceysands Hotel and three floors of Ceylinco House.
Ms. Anusha Emmert, President, GK Depositors’ Society told the Business Times that over 2,000 depositors had given their written consent for the repayment plan.
She says all the depositors were of the view that former GK directors including Lalith Kotelawala have a genuine interest to settle their deposits.
On the other hands these depositors have been suffering since December 2008 without money to meet their daily needs. They were given only Rs.100,000 each under the previous re-payment plan in accordance with the Supreme Court directive, she added.
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