Sept 29, 2010 (LBO) – The Finance Company, a Sri Lankan finance company recovering after a run, is to raise 1.6 billion rupees in fresh capital by attracting new investors and convert deposits into shares, a statement said. The Finance Company is recovering and had reduced losses to 431 million rupees in the June 2010 quarter compared with a loss of 693 million rupees the year before. The Central Bank said its Monetary Board has decided that it is now time to recapitalize the company in order to “facilitate the smooth operations of the company in the future.”
The new scheme is to be implemented by December 15, 2010.
It has asked The Finance Company (TFC) to invite new investors to infuse fresh capital in the form of 40 million ordinary shares at 40 rupees each.
TFC also has to “attract strategic investors capable of infusing funds and playing an effective leadership role in managing the firm.”
The central bank said TFC will also provide an opportunity for about 10 percent of its existing deposits to be converted into 100 million non-voting shares of 20 rupees each, converting about two billion rupees in deposits into equity.
“While this would enable the depositors to have an equity stake in TFC, w