COLOMBO (EconomyNext) – Sri Lanka’s ETI Finance Limited, an unlisted finance company, will get a 2.8 billion rupees in cash where its land holdings will be sold to a related company, which is raising debt.
ETI Finance no longer has a public rating. According to documents filed on the Colombo Stock Exchange it is now controlled by EAP Holdings.
A number of EAP Edirisinghe group companies are now directly controlled by ETI Finance Limited including Swarnamahal Jewellers Ltd (100 percent), Hotel Sapphire (Pvt) Ltd (100 percent), Hotel Concord (Pvt) Ltd (90 percent) and Swarnamahal Financial Services Plc (90 percent) which is listed.
Swarnamahal Jewellers Limited in turn owns 81 percent of EAP Films and Theatres with ETI Finance directly holding the balance 19 percent. EAP Films owns 100 percent of EAP Broadcasting Company, which runs television stations.
EAP Broadcasting owns Colombo Communications, which runs radio stations and Galalzy Landmarks Limited, a newly set up property company.
EAP Broadcasting plans to raise 3.0 billion rupees through 4 and 5 year pulbic listed debt paying 10.50 percent (annual coupon) and 11.00 percent (quarterly), which will be invested in Galaxy Landmark as equity (one billion rupees) and an intercompany loan (2.0 billion).
The loan which will carry a 12.0 percent interest rate will be settled with interest after the sale of the building at the end of 7-years.
Galaxy will pay 2,844 million rupees for a series of properties owned by ETI Finance effectively getting liquidity.
Galaxy will in turn pay 925 million rupees for a 109 perch Galle Road property housing Swarnamahal Jewellers and broadcasting complex, 200 million for a property where Impala Cinema is located, 600 million for a property in Wellawatte where Roxy Cinema is located.
It will also pay 115 million rupees for a Borella property where EAP Restaurant is located and 290 million rupees for Hotel Concord property in Dehiwala.
In addition Galaxy will also buy Cinexpo Cinema property in Kurunegala for 250 million rupees and a Cotta Road, Borella property for 214 million rupees.
The deals with inject 2.8 billion rupees to ETI Finance.
EAP Group is now chaired by Mano Tittawella, who analysts say engineered the re-structure of People’s Bank, which had negative net assets and non-performing loans, when he headed the Public Enterprise Reform Commission in the late 1990s.
Tittawella is also the Deputy Chairman of EAP Broadcasting Company.