9 July 2018 10:16 am
The Central Bank said the troubled ETI Finance Limited (ETIFL) has paid back 10 percent of the deposit liabilities to its existing deposit holders in the first round of payments concluded two weeks ago, and the second and third rounds of payment will begin shortly, settling over 20 percent of deposit liabilities.
Addressing the fourth monetary policy press conference last Friday, the Central Bank Governor Dr. Indrajit Coomaraswamy said the Singapore-based Blue Summit Capital and its local partner Ben Holdings Ltd., have transferred US $33 million as the first tranche while another US $11 million is expected within this week. The final tranche is scheduled be received by end of July.
ETIFL board of directors entered into a deal with a joint venture company between Singapore-based Blue Summit Group and its local partner Ben Holdings, to dispose ETIFL’s shares in its subsidiary and sub-subsidiary companies and investment properties for US $ 75 million.
However, Dr. Coomaraswamy noted that a second investor is needed for ETIFL to continue functioning as there’s a hole in assets and liabilities of about US $100 million.
“They (Blue Summit and Ben Holdings) initially brought in US $33 million. Out of that ETI has paid 10 percent of depositors’ money and ETI will receive another US $11 million today or tomorrow.
“The final tranche got bit delayed. It should have come by end of June, but they have asked more time until end of July. Once that comes in, we would have paid 20 percent of the ETI depositors’ money .If an investor is not forthcoming then we need to look into liquidation,” he said.
Dr. Coomaraswamy expressed confidence that two third of ETI’s deposit liabilities can be settled with US $75 million and the utilisation of the Deposit Insurance Scheme.
Speaking to Journalists, Deputy Governor C.J.P. Siriwardana elaborated: “Even after infusing Rs.11.5 billion (US $75 million) to the ETI, still there’s a hole of Rs.14-15 billion (US $100 million). That’s why we are searching for a second investor for ETI.
If we can find the second investor, ETI can come back to the business. However, if we are unable to find a second investor, then we have to liquidate the company and pay out depositors under the Deposit Insurance Scheme.”
According to him, 62 percent of ETIFL deposits are below Rs.600, 000 and hence, these depositors are eligible for the full pay-back under the Deposit Insurance Scheme.
Siriwardana also said that ETIFL will consider holding the second payment round for depositors shortly as the company has Rs.3.9 billion of excess funds from the first tranche of payment from ETIFL assets sale.
The third payment round is expected to begin after July once the final tranche is transferred to ETIFL account.
The assets of ETIFL and its subsidiaries include of EAP Films and Theatres, Swarnamahal Jewellers and EAP Broadcasting.
Blue Summit Group is expected to take over 40 percent of EAP Broadcasting ownership while the local partner, Ben Holding which is reportedly led by investment banker Alex Lovell, is expected to take over 60 percent of the ownership due to regulations restricting full ownership of media organisations by foreign parties.
ETIFLL has about 24,000 depositors with Rs.33 billion in deposits. (NF)