July 01, 2009 (LBO) – Sri Lanka’s Fitch Ratings Lanka said it upgraded Seylan Merchant Leasing (SML) national long-term rating to ‘BBB-(lka)’ from ‘BB +(lka)’ on the acquisition of a 84.5 percent stake by People’s Leasing Company (PLC). PLC’s purchase consideration amounted to 441.4 million rupees for the 84.5 percent stake in SML and was funded with cash.
As per local regulations, the company intends to make an offer to purchase the remaining stake in SML and is expected to submit a proposal by July 07, 2009.
The incremental expense is expected to be no more than 81 million rupees, which is also expected to be met via the company’s cash cushion, Fitch said.
At end-March 2009, PLC had total assets of 25.4 billion rupees, a network of 20 full-fledged branches, and 50 window offices within PB’s extensive network.
SML had total assets of 2.2 billion rupees, 12 branches and 11 window offices.
Fitch said in a statement it removed the rating from Rating Watch Positive (RWP), while the Outlook is Stable.
SML was placed on RWP on 13 March 2009 consequent to the announcement of the possible acquisition.
At the same time, Fitch has confirmed PLC’s National Long-term rating at ‘A-(lka)’ and the national sho