August 4, 2006 (LBO) – Singer (Sri Lanka) Ltd has opted to accept up to 800 million rupees in debt after its initial 600 million rupee debenture issue was oversubscribed. Fitch Ratings Lanka, which gave the initial four-year issue a A+(lka) rating said Friday that they were extending the same scale to the extra 200 million rupee debt that was subsequently taken.
“Singer’s management decided to upsize the issue given the demand for the notes and the consequent oversubscription,” the risk evaluator said in a statement.
Around 600 million rupees will be channeled to partly retire bank borrowings maturing this year, with the balance used to finance Singer’s consumer loan book.
The extra 200 million rupees, says Fitch, will not have a negative bearing on Singer’s credit profile, with total debt stock standing at 4.674 billion rupees for the six months to June.
Singer currently commands the top slot in the country’s consumer durable market in terms of sales and 690 distribution outlets.
Broadly 52 percent of Singer’s sales are financed by its in-house consumer financing operation. Interest earned on consumer loans accounted for 13 percent of the company’s top-line in FY’05.