Jan 20, 2012 (LBO) – Fitch Ratings Lanka said it has maintained Ceylease Financial Services’ ‘BB+(lka)’ National Long-Term rating on Rating Watch Evolving (RWE). Two state-owned banks control Ceylease with Bank of Ceylon owing a 55 percent stake and a 72 percent stake held by Merchant Bank of Sri Lanka (MBSL).
Fitch said in a statement Ceylease was placed on RWE in July 2011.
That followed MBSL’s announcement that the Central Bank has provided “in principle approval” for the issuance of a specialised banking license to MBSL subject to its amalgamation with Ceylease and other entities of Bank of Ceylon.
“The RWE reflects the uncertainty surrounding the final details of the intended merger, the profile of the merged entity, and the resulting shareholding of state-owned BOC in the merged entity,” Fitch said.
Fitch said it will resolve the RWE once the details of the merged entity become more definitive.
“Retention of the merged entity within the BOC group as well as an increase in BOC’s effective shareholding and future linkage with BoC group may lead to a rating upgrade,” it said.
“Conversely, a decrease in BOC’s effective shareholdi