Sri Lanka’s Ceylinco Leasing goes for debt and IPO

Sri Lanka’s Ceylinco Leasing Corp plans to raise a billion rupees in debt and issue shares to the public later this year, officials said Wednesday. Sri Lanka’s Ceylinco Leasing Corp plans to raise a billion rupees in debt and issue shares to the public later this year, officials said Wednesday. An initial public offering is on the cards within the next six-months, to raise funds to meet Central Bank’s capital requirements.

Ceylinco Leasing’s present capital stands at Rs. 75 million. However, additional funds are needed to meet upcoming regulatory requirements of minimum Rs. 100 million later this year.


Type

Interest Rate

Mode of Payment
1

14.5% with
one-year put option

15.0%
without put option

13.5% with
put option

14.0%
without put option

Annually

Annually

Monthly

Monthly

2
3
4
(Source:
Ceylinco Leasing Corp. Ltd)

“We want to expand our operations and start our factoring unit this year, and also show good results before going for an IPO this year,” the firm’s Director Hiran de Silva told reporters.

The company’s Rs. 2 billion leasing portfolio currently funds a range commercial property, motor vehicles, plant and machinery and so forth.

Funds raised through the upcoming four-year unlisted debenture will go to double the leasing business within the next 11-months, General Manager Bandula Senanayake explained.

As the island’s interest rates gradually creep up, Ceylinco is parceling the issue into blocks of between Rs. 95 million to Rs. 100 million each month.

The issue is priced at between 13.5 percent (for those opting for monthly payments with a one-year put option) to 15 percent (investors who hold it to maturity).

“Local interest rates are bit volatile these days, so we are offering potential investors and option of selling out after one-year, or investing in stages each month taking advantage of high rates,” says de Silva.

The nine-year old firm has a three-percent share of the island’s Rs. 19 billion leasing market.

The firm is a member of the privately-held US$ 600 million Ceylinco Consolidated Group, which controls over 140 companies doing business in banking, insurance and financial services, real estate, jewellery, property development, tourism and information technology.

The group has also extended its reach to set up units in Singapore, Nepal, Malaysia, India, the United States, Australia, Belgium, Thailand and Japan.

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