People’s Leasing Company has raised Rs. 400 million by securitising part of its small but growing hire purchase portfolio, the firm said Monday. People’s Leasing Company has raised Rs. 400 million by securitising part of its small but growing hire purchase portfolio, the firm said Monday. Hire purchasing accounts for Rs 3 billion of the firm’s business while its leasing portfolio now stands at Rs. 14 billion.
The four-year issue, which was structured by Investec Capital (Pvt) Ltd., was subscribed by DFCC Bank, National Savings Bank and Nations Trust Bank.
“There is a small advantage for us to engage in hire purchase business because of value added taxes. Vehicles registered for over a year in Sri Lanka are currently exempted from VAT, whereas for leases it is subjected to 15 percent,” PLC’s Deputy Manager (Finance) Udesh Gunawardene told LBO.
PLC is currently one of the biggest players in the leasing industry that takes advantage of the debt market to raise funds.
For the fiscal year ended March 31, 2005, PLC made a net profit of Rs. 310 million (up 38 percent) after making a Rs. 437 million general provisioning.
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