Payment to ETI Finance deposit holders to begin next month

21 May 2018 10:09 am - 0     - {{hitsCtrl.values.hits}}

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  • CB says ETIFL struck deal with foreign investor to dispose assets worth  US $ 75mn
  • Buyer transfers US $ 32mn to ETIFL in an initial tranche
  • ETI Finance has about 24,000 depositors with Rs.33 billion in deposits
  • Details of payment plan to be informed to depositors shortly

 

The Central Bank of Sri Lanka said yesterday the payment for deposit holders of distressed ETI Finance Limited (ETIFL) will begin on June 05, with the money ETIFL has received through a sale of assets to a foreign investor. 


The Central Bank said ETIFL board of directors has entered into a deal with a foreign investor to dispose ETIFL’s shares in its subsidiary and sub-subsidiary companies and investment properties for a net amount of US $ 75 million, subject to compliance with applicable laws and regulations.


Out of the US $ 75 million, the buyer has already transferred US $ 32 million to ETIFL and the company has received its Sri Lankan rupee value of little over Rs.5 billion. 


“Having considered the request of the depositors, ETIFL has been instructed to pay urgently, 10 percent of deposit liabilities which amounts to approximately Rs. 3,350 million and the accrued interests of Rs.1, 400 million (approximately) as at end May 2018 using the sales proceeds received. 


The payment will commence on 05.06.2018. Also, ETIFL has been instructed to pay a further 10 percent of deposit liabilities on receipt of the balance part of the sales proceeds (US $ 43 million),” the Central Bank said in a statement.   


The monetary authority further said the details of the payment plan will be informed to depositors by ETIFL shortly.


ETI Finance has about 24,000 depositors with Rs.33 billion in deposits.


As revealed in a previous article by Mirror Business the assets that are lined up to be sold are EAP Films and Theatres Private Limited, EAP Broadcasting Company Limited and Swarnamahal Jewellers. 


During a press conference a couple of weeks ago, the Central Bank Governor Dr. Indrajit Coomaraswamy responding to a Mirror Business inquiry said the investor into ETIFL assets is awaiting legal clearance to transfer the remainder of the money that relates to the media business.


“The remainder of the money relates to the media business and there are certain legal hurdles to be cleared and they are in the process of being cleared,” he said.
Sri Lanka is said to be having regulations that prevent foreign parties from having controlling stake in a local media business.


Although Governor Coomaraswamy was reluctant to reveal the name during the press conference, the investor in ETIFL assets is believed to be a consortium led by Singapore-registered Blue Summit Capital Management Pte Ltd. 


In April, a subsidiary company of Blue Summit Capital, Serendib Holdings Pte. Ltd, bought the controlling stake of Sri Lanka’s Serendib Engineering Group PLC in a Rs.200 million deal. 


According to the mandatory offer document by Serendib Holding on Serendib Engineering, the shareholders and directors of Blue Summit Capital Management were Omar Siraj M. Qandeel, a Grenadian national and Rodrigo Don Cyril (Junior), a citizen of Singapore.


Qandeel’s name was previously linked to a company along with Muthusamy Manivannan to a company that was said to have launched a communication satellite under the patronage of the previous Rajapaksa government. 


According to a recent newspaper report, also joining the consortium is Sri Lankan entity Ben Holdings Ltd. of Alex Lovell, who was instrumental in making private equity giant TPG to invest in Union Bank of Colombo PLC a few years ago. 


Meanwhile, according to Governor Coomaraswamy, this investment wouldn’t solve the ETIFL’s liquidity issues.


“We need another investor to come in. But at least it (current investment) gives us a chance to move forward and we do not want to say anything too early that upsets the apple cart,” he said. 

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