A major United Arab Emirates (UAE) conglomerate with interests in Pakistani banking plans to acquire Sri Lanka’s failed Finance and Guarantee Company Ltd (F&G), infusing new capital to overcome liquidity constraints and resurrect the business of the former Ceylinco Group company, Finance Ministry sources said.
The Pakistan representative of the UAE group has held several rounds of talks with the Central Bank and Merchant Bank of Sri Lanka, F&G’s Managing Agent, and a deal will be finalised soon, a senior official of the ministry said, adding that infusion of fresh capital is essential for this registered finance company to continue its operations.
The investor is eager to start business in Sri Lanka and it is more convenient to take over an existing finance company rather than setting up of a bank, he said. Some 60% of the company’s deposits have been converted to shares with the consent of depositors, he revealed.
Facilitator of the deal, Khalil Masood,Chairman /CEO of SKM Lanka Holdings (Pvt) Ltd, who is also the former chairman of the Pakistan Securities Exchange Commission, told the Business Times, that the due diligence of F&G has been completed and the new investor has expressed willingness to invest in this venture. He noted that the President/CEO of the UAE group recently visited Sri Lanka to get first hand information of the company. Mr. Masood said that the new look F&G company with the backing of the investor will be able to restore public confidence in the troubled firm.
F&G suffered a major liquidity crisis in the wake of the collapse of the Ceylinco Group. The Central Bank then appointed Merchant Bank of Sri Lanka PLC as its Managing Agent in March 2009 in order to strengthen the company and restore public confidence.Consequent to the fundamental rights application filed by some investors of F&G Property Developers (Pvt) Ltd and F&G Real Estate Co Ltd, the Supreme Court issued a stay order to F&G on June 2009. These developments restrained the day to day business operations of the company.
On October 2009, the Supreme Court lifted the stay order and currently, the Managing Agent has taken steps to continue business operations of the company. The Central Bank has issued necessary directions to enable the company to strengthen its financial position.
|
E-mail
