ComBank in US $ 50mn private placement deal with IFC

Commercial Bank (Ceylon) PLC, the country’s largest private lender in terms of assets, on Tuesday said it was going for a US $ 50 million private placement deal with International Finance Corporation (IFC), a member of the World Bank Group.

The investors would be IFC, IFC Financial Institutions Growth Fund LP (FIG Fund) and IMFC Emerging Asia Fund LP (EA Fund). They will be issued 125 million ordinary voting shares of ComBank, by way of a private placement, at Rs.80 per share.

ComBank share closed at Rs.78, down 80 cents yesterday.

The conversion of US $ 50 million will be at the best available rate of exchange of US dollars to Sri Lankan rupee that can be reasonably obtained by each of the respective IFC parties, three business days prior to the date of issue of the shares, a stock exchange filing said.

IFC will invest up to US $ 15 million or in 37.5 million shares while FIG Fund and EA Fund will invest up to US $ 17.5 million each, in 43.75 million shares each. 

IFC already has a 4.44 percent stake in ComBank.

The stated capital of ComBank at the date of this announcement was Rs.42.9 billion.

The bank said the proceeds of the share issue will be utilised to raise the Tier I capital of the company, to support the business growth envisaged in the future of the company.

The placement is subject to the approval by the shareholders and stock exchange.

IFC last month committed a US $ 50 million loan to help the small and medium businesses in the country dealing with the adverse economic impacts of COVID-19.