ECONOMYNEXT – Washington based International Finance Corporation said it had issued a 5 million US dollar equivalent Sri Lanka rupee denominated bond which will be used to finance a unit of publicly traded Sunshine Holdings Plc.
“IFC’s first rupee-denominated bond in Sri Lanka comes at a critical time – in the midst of the COVID-19 pandemic – and will be significant in contributing to support the development of a more resilient, efficient and inclusive financial sector,” Hector Gomez Ang, Regional Director for South Asia at IFC said in a statement.
“With this landmark transaction, we aim to encourage private sector to invest in the future of the country, paving the way for job creation and inclusive and sustainable growth.”
The ‘Serendib Bond’ styled security will ensure that private-sector has access to long-term offshore financing in local currency, while hedging foreign exchange risks, at a critical time the IFC said.
Sri Lanka’s rupee is now under severe pressure from liquidity injections and exporters who have borrowed dollars are accumulating dollars to make loan repayments.
Proceeds from IFC’s 5 million dollar equivalent bond will finance Sunshine Consumer Lanka Ltd, a subsidiary of Sunshine Holdings PLC.
The fund will be invested in a confectionary supply chain and strengthen the overall competitiveness of the country’s fast-moving consumer goods (FMCG) sector, IFC said.
“IFC’s partnership will allow us grow further through diversification of our businesses and expand our presence in the consumer goods sector,” Vish Govindasamy, Group Managing Director of Sunshine Holdings PLC was quoted as saying in a statement.
“We are also happy to be a part of IFC’s first Serendib Bond – which protects our business from exchange rate volatility as well as any increase in interest rates, while giving us access to foreign credit markets to grow the business.”
In November 2019, IFC had issued a Taka Bangla Bond in London Stock Exchange. (Colombo/Oct13/2021)