- CB officials currently evaluating business proposal to revive ETI Finance by new investor
- ETI Finance’s shares in subsidiary and sub-subsidiary companies and investment properties successfully divested
By Nishel Fernando
The Central Bank is in negotiation with a new foreign investor to restructure the troubled ETI Finance Limited (ETIFL) who may invest up to US $75 million in the troubled finance company, Mirror Business learns.
According to highly placed sources, the foreign investor has already submitted a business plan to revive the ETIFL, and the Central Bank officials are currently evaluating it.
Central Bank Governor Dr. Indrajit Coomaraswamy earlier told the media that at least US$ 100 million is required to turn around the ETIFL. However, the ETIFL board of directors appointed by the Central Bank believes that US$ 75 million would be sufficient to bring ETIFL back to business.
ETIFL has about 24,000 depositors with Rs.33 billion in deposits; however, there’s a hole in assets and liabilities of about US$100 million.
The Central Bank remains optimistic that the deal would go through with the new investor. Central Bank officials with whom Mirror Business talked to said there are a few other investors who also have expressed their interest in investing in ETIFL.
They said ETIFL has a unique value proposition for investors, as Central Bank has halted issuing new license for finance companies. In addition, ETIFL’s trained staff, the long-standing operation and the large lending portfolio has been identified as the main assets of the company.
Meanwhile, the Central Bank expects to complete the settlling down of 35 percent of the deposit liabilities (including interest payments) to ETIFL’s existing deposit holders shortly.
As of now, the Central Bank has paid 20 percent of deposit liabilities through funds received disposing ETIFL’s shares in its subsidiary and sub-subsidiary companies and investment properties for US$ 75 million to a joint venture company between Singapore-based Blue Summit Group and its local partner Ben Holdings linked to investment banker Alex Lovell. The Central Bank officials confirmed that all the assets were transferred to the joint venture company successfully including EAP Broadcasting Company Ltd.