Sri Lanka’s ETI Finance last tranche expected this month
ECONOMYNEXT – An investment group which is buying assets of ETI Finance Plc, has asked till end of this month to make the final payment, Central Bank Governor Indrajit Coomaraswamy said.
A consortium led by Blue Summit, a Singapore-based investment company and Ben Holdings, a Sri Lanka registered firm, had already paid about 32 million US dollars for assets of the ETI group, which includes a television station.
Another 11 million dollars is expected in days, he said. When the money comes, another tranche of depositor cash will be paid.
The investors had asked time till end of July to remit the final tranche, though it was originally expected to come in June which will allow 20 percent of investors to be repaid.
To make up for the shortage another at least 100 million dollars will be required from an investor.
"If an investor is not forthcoming then we would need to look in terms of liquidation," Governor Coomaraswamy said.
"But with the 11.5 that would have come in from the investor who bought the subsidiary, plus the deposit insurance money of 600,000 per depositors, we should be able to pay two thirds of the depositors.
"That is if we can’t find an investor to resuscitate the company."
Sri Lanka’s non-bank finance companies play in the so-called sub-prime market lending to borrowers who cannot usually get money from banks, and they also pay higher interest rates.
In the last decade, there had been regulatory forbearance, where action was not taken to quickly liquidate firms, when a capital shortage was discovered.
In the case of ETI, regulators and the owners had placed other companies owned by them as capital to make up for some of the losses. (Colombo/July09/2018)