People’s Leasing Company PLC ( PLC), Sri Lanka’s largest lease financier and a unit of state-run People’s Bank (PB), has temporarily put on hold plans to raise USD 150 million from a Euro dollar bond issue.
Accordingly, the company now plans to sell the notes in September, PLC’s Chairman, D P Kumarage said.
However, he declined to comment further on the matter stating that it was still premature to disclose any additional details.
PLC recently announced the plan to raise the said amount through the bond, and noted that it had made an application for the listing of the notes on the Singapore Exchange Securities Trading Limited.
According to press reports, the road show pertaining to the offer was launched on July 18, 2012 in Hong Kong with Barklays Capital and HSBC as Lead Managers, and was moved to Singapore on July 19, before winding up in London on July 23.
Standard and Poor’s Ratings Services (S&P) assigned a ‘B+’ long-term and ‘B’ short-term issuer credit ratings to the PLC bond with a stable outlook.
Further, Fitch Ratings too assigned a LongTerm Foreign- and LocalCurrency Issuer Default Rating (IDRs) of ‘B+’ with a Stable Outlook.
Meanwhile the company has also applied to the Central Bank of Sri Lanka (CBSL) for registration as a Licensed Finance Company (LFC), which, if successful, will be permitted to accept deposits from the public.
Kumarage told Mirror Business that discussions on the matter are being held with CBSL currently, and the license would be granted in a few months.
“We are awaiting the letter from Central Bank and within the next two to three months, we should get the license,” he said.
As a leasing company, PLC is cur rently not allowed to raise deposits from customers. Hence, there is a heavy dependence on market borrowings.
The company however owns 86 percent in its listed LFC, Peoples Finance PLC (SMLL), and has increased its deposit base by 87 percent yearon-year to Rs.8.6 billion as at March 31, 2012 through SMLL.
Meanwhile, Kumarage refuted claims that PLC was considering the acquisition of the remaining stake in SMLL and termed them as false rumours.
PLC’s net profit for the June quarter (1Q13) fell 59 percent Year-on-Year to Rs.710 million amidst a reversal of general provision i n 1Q12, which boosted 1Q12 net profit by Rs1.06 billion.