Recovery Road

Mar 25, 2011 (LBO) – Fresh capital will soon be given to the remaining Sri Lankan finance companies that got into trouble two years ago, prompting intervention by the banking regulator, senior central bank officials said. “It has taken over two years but was much quicker than the liquidation process.” Strategic investors have been found for three finance companies and one leasing company while prospective strategic investors are being reviewed for the remaining four finance companies.

Three finance companies have started normal business operations and their boards reconstituted, said Nelumani Daulagala, director of the central bank’s department of supervision of non-bank financial institutions.

Managing agents appointed by the central bank have been released in two finance companies while one public share issue has been completed to raise fresh capital.

Priyantha Fernando, central bank deputy governor, said the biggest of the troubled firms, The Finance Company, was on the road to recovery.

The Finance Company, earlier managed by the Ceylinco group, has raised 1.6 billion rupees from a share sale which was oversubscribed.

Fernando said The Finance was selected for restructuring first as it was big