Leasing Sale

March 06, 2009 (LBO) – Sri Lanka’s largest leasing company is in talks to buy a leasing company in the island’s Ceylinco group, a listed investment bank in the group said in a stock exchange filing. Seylan Merchant Bank is in talks with People’s Leasing Company, a unit of state-run People’s Bank, to sell a controlling stake in Seylan Merchant Leasing, and had signed a non-disclosure agreement, the company said.

Both Seylan Merchant Bank and Seylan Merchant Leasing are listed.

Seylan Merchant Bank, which holds almost 84 percent of Seylan Merchant Leasing, is 52 percent owned by Seylan Bank, which is part of the troubled Ceylinco group.

Seylan Bank has been placed under guardianship of state-run Bank of Ceylon.

Ceylinco group chairman Lalith Kotelawala has been remanded over fraud allegations at Golden Key Credit Card Company, an unlisted group firm, which collapsed.

Kotelawala has promised to repay depositors by selling his stake in Seylan Bank.

Earlier in the day, Sri Lanka’s central bank said it was looking to change the top management of The Finance Company, a listed finance company in Ceylinco group, which is registered with the regulator.

New ‘managing agents’