Restructuring

Mar 05, 2009 (LBO) – An investment banking unit linked to a state bank is examining several troubled finance and real estate firms of Sri Lanka’s Ceylinco group, a media report said. The Daily Mirror newspaper said the Merchant Bank of Sri Lanka, a listed subsidiary of state-run Bank of Ceylon, is planning to re-structure a part of the Ceylinco group known as ‘F&G group’, and has stopped refunds.

Ceylinco has a licensed finance company known as Finance and Guarantee Co. Ltd as well as several others with the pre-fix F&G.

The Daily Mirror quoted Merchant Bank chairman Janaka Ratnayake as saying that F&G group liabilities were 12,879 billion according to book value and assets were around 13,487 million rupees.

F&G Real Estate Company Ltd had been offering 42 percent interest per year for some customers and has been rolling over deposits, he said.

While F & G Co. Ltd and F&G Properties have a “sufficient” asset base investors in F&G Real Estate Co. Ltd, “might have to sacrifice a certain period” to get refunds, Ratnayake was quoted as saying.

The report said refunds have been stopped to prevent influential people from taking out money at th