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Sri Lanka’s Sanasa Bank private placement to raise Rs3.3bn

ECONOMYNEXT – Sri Lanka’s Sanasa Development Bank (SDB) said it plans a private placement of ordinary shares at Rs140 a share and convertible loans from international lenders to raise Rs3.3 billion to strengthen its capital base and lending portfolio.

SDB has signed deals with FMO (the Netherlands Development Finance Company), the Dutch development bank and the SBI-FMO Emerging Asia Financial Sector Fund, a statement said.

It also intends to sign an agreement with International Finance Corporation (IFC), the private sector lending arm of the World Bank.

SDB will issue 10.4 million shares at Rs140 each resulting in the three lenders having a 21.79% stake of the bank after the private placement.

The private placement and borrowings are subject to regulatory approvals with the loans being considered as Tier II capital, SDB said.

SDB’s current stated capital is Rs4 billion and the new funds will further strengthen SDB’s capital adequacy ratios and help meet loan demand from small businesses, it said.

They will also “ensure the bank is well geared to pursue loan book growth while maintaining healthy capital adequacy levels, thereby improving the profitability of the bank,” the statement said.

FMO is known as Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. in Dutch.

SBI-FMO Emerging Asia Financial Sector Fund was launched by Japan’s SBI Holdings, Inc. and FMO to invest in financial sector opportunities in emerging Asia with a focus on India, Sri Lanka, Bangladesh, Indonesia, Philippines, Thailand, Cambodia and Vietnam.
(COLOMBO, Dec 16, 2016)





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