July 20, 2018 (LBO) – Central Bank of Sri Lanka (CBSL) registered finance company Multi Finance is to increase its capital base by way of private placement.
The Colombo Stock Exchange listed company is to raise Rs200mn at Rs13/share which is approximately the net asset value of the company. The shares will be placed with controlling shareholder Fairway Holdings. Fairway is one of the largest property developers in Sri Lanka controlled by lawyer cum property developer Hemaka De Alwis.
In a stock exchange announcement released today, the purpose of the capital raise is to: ” meet the core capital requirement of Rs1bn in terms of section 3.2 of Finance Companies Direction No.1 of 2013 to comply with the Finance Companies minimum core capital direction No.2 of 2017.”
The issue is subject to approval by the CSE, SEC and shareholders at a general meeting.
Multi Finance finished last year close to breakeven and is supporting a small balance sheet of just 2 times equity. Deposits are a relatively small Rs650mn, however this is up 75% from 12 months prior.