- Calls EOIs on two international schools run by the firm
- Accumulated losses as at December 31, 2017 tops Rs.22bn
The troubled The Finance Company PLC (TFC) has resorted to dispose its assets and real estate as the company appears to be making a last ditch attempt to revive fortunes.
To this end the company last week called for expression of interest (EOI) from parties to acquire two international schools it runs.
TIS Educational Services Private Limited is a 100 percent owned subsidiary of The Finance Company and it runs two private schools, one in Galle and another one in Payagala.
The troubles at The Finance Company began a decade ago when the Golden Key Credit Card Company, a subsidiary of the Ceylinco group, collapsed as it was unable to settle billions of customer deposits raised at exponentially high rates.
TFC, a registered finance company with the Central Bank and a more stable within the Ceylinco group, also ran into deep trouble when it faced a deposit run and the borrowers stopped servicing their loans.
Although the company is now on a 5-year strategic plan approved by the Monetary Board, TFC has amassed accumulated losses running into several billions.
The company has accumulated losses every quarter to a thumping Rs.22.2 billion by the end of December 31, 2017 from Rs.20.5 billion by end March in the same year.
The total shareholder funds or equity came down by Rs.1.6 billion to Rs.16.1 billion.
During the most recent quarter ended in December 31, 2017, the company made a loss of Rs.598.2 million expanding from a corresponding quarter loss of Rs.483.5 million. The losses for the nine months rose to Rs.1.7 billion from Rs.1.2 billion.
The Employees’ Provident Fund has 8.43 percent stake in The Finance Company being the fifth largest shareholder.
By December 2017, The Finance Company had properties, plant and equipment worth of Rs.2.3 billion and investment properties worth of Rs.1.9 billion which cannot be liquidated fast enough.
Apart from the above, the company has another Rs.805.8 million worth of investments in real estate which has come down from Rs.986.5 million.
The loans and receivables are worth little above Rs.10 billion, little up from Rs.9.8 billion in March.
The deposits have grown by 8.0 percent to Rs.30.7 billion during the nine months.
The growth in deposits over loans resulted in a negative net interest expense of Rs.700.4 million for the nine months, expanding from Rs.124.4 million during the corresponding period of the previous year.