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Sri Lanka’s The Finance struggle to recover Ceylinco assets

ECONOMYNEXT – Sri Lanka’s The Finance Plc, a unit if the now defund Ceylinco group which has a 14 billion rupee hole in its balance sheet, said it was struggling to recover loans and other assets given to member firms without proper documentation.

"..{O]ne of the most challenging tasks the board had during the year under review was to initiate action on recovering the loans granted to former Ceylinco Group companies,"  current chairman Wasantha Kumarasiri told shareholders.

"Lack of documents on many transactions on historical legacy issues is the main challenge faced by the Board."

The board of the non-bank lender had been replaced by the regulation as part of efforts to restructure the firm.

A property, France Road Residencies, for which the firm had title, but was under a different Ceylinco firm had begun to transfer and a buyer had been found for 575 million rupees. However a ‘new challenge’ had emerged in the completing the transfer, Kumarasiri said without elaborating.

A buyer has been found for The International School in Galle and Payagala, General Manger Nimal Mamaduwa said.

Unprofitable branches had been closed and head office staff reduced to cut costs.

In the March quarter The Finance lost 743 million rupees. It had interest expenses of 1.09 billion rupees and interest income of 791 million rupees.

The Finance had 22 billion rupees of assets on the books, 29 billion rupees of deposits from customers and also 5.3 billion rupees in borrowings, giving negative net assets of 15 billion rupees.

The firm is looking for a buyer who can infuse 125 million US dollars. (Colombo/Apr24/2018)
 

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