ECONOMYNEXT – Sri Lanka’s The Finance Company has appealed against a central bank decision to cancel its licence, saying it was in talks with three investors keen to acquire its banking licence by injecting funds to revive the firm.
However, the Central Bank has disputed these claims.
The central bank last month said it had decided to cancel the license of The Finance Co from 23rd October 2019, after failing to find an investor to revive the troubled finance company, with the aim of safeguarding the interests of depositors and other creditors.
The Finance Co. (TFC) said n a statement it had asked for more time to negotiate with investors.
“Since publication of the “Notice of Cancellation”, TFC was approached by three interested parties to consider an investment on the basis the banking license could be obtained with sufficient investment,” a statement said.
“TFC is continuing to facilitate potential investors locally and overseas. Some discussions with potential investors are continuing.”
TFC had 27.7 billion rupees in deposits at the end of June 2019. Its loan book was 3.7 billion rupees. The firm had 10.8 billion rupees in assets to its liabilities of 30.9 billion rupees.
A crisis in the Ceylinco Group in 2008 hit TFC with a severe liquidity shortage.
Several attempts in the past to attract a potential investor to restructure the company did not materialize to a satisfactory level yet, the central bank has said.
(COLOMBO, 26 November 2019)
Changed:new paragraph added ‘However, the Central Bank has disputed these claims’.