Strategic Investor

March 27, 2009 (LBO) – Sri Lanka’s central bank has called for proposals from investors to invest 5.7 billion rupees (about 50 million US dollars) to take a 33 percent stake in Seylan Bank, part of the troubled Ceylinco group. Expressions of interest (EOI) have been invited from local or foreign parties interested in becoming a “strategic partner” of Seylan Bank, the island’s fifth largest commercial bank in terms of assets with a seven percent market share.

Apart from the initial capital injection, a further investment in debentures of Seylan Bank is also expected, the regulator said in a newspaper advertisement that called for EOIs

The central bank in December 2008 put Seylan Bank under the management control of state-owned Bank of Ceylon after a “major scam” was uncovered within an unlisted firm of the Ceylinco group to which Seylan belongs, it said.

It described Seylan as a systematically important bank with a network of 93 branches and business focused on corporate and retail lending, including the small and medium enterprise sector, as well as overseas money transfers.

The strategic investor would be required to reduce their ownership of Seylan Bank to 15 percent in accordance with regulations on owne