ECONOMYNEXT – Sri Lanka’s central bank has decided to call for expressions of interest to find potential investors to revive the failed The Finance Company after repeated efforts till now failed.
A statement said The Finance Company (TFC) was severely impacted by the failure of a number of financial institutions within the Ceylinco Group in 2008.
“Since then the financial status of the company deteriorated gradually and it currently operates with severe liquidity issues, which need to be addressed immediately,” it said.
“Although, several efforts were made to identify prospective investors and to restructure the company, such efforts have not materialized to a satisfactory level yet.”
The Monetary Board of the Central Bank has now decided to extend for a month from 15th September 2019 regulatory actions imposed on 15th February 2019 suspending accepting new deposits, withdrawal of deposits and disbursement of loans to facilitate the restructuring of TFC.
The measures are aimed at safeguarding the interests of depositors and other creditors and to facilitate a potential investor for TFC, the statement said.
“It is now vital to find an acceptable investor to bring equity capital to TFC within an agreed time frame to avoid further deterioration of the financial condition of the company.”
The Monetary Board instructed TFC to call Expressions of Interest (EOIs) from potential investors with immediate effect and to request such investors to submit their business restructuring proposals to revive TFC, it said.
“Interest due for deposits will be paid continually to the depositors,” the central bank said.
“All borrowers of the company are strictly advised to pay their dues.
“The deposit insurance and liquidity support scheme will also safeguard the interest of all depositors to a maximum of 600,000 rupees per depositor, which will cover 94 percent of the depositors in full.”
(COLOMBO, 17 Sep, 2019)