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People’s Merchant Bank gearing up for more leasing business
The People’s Merchant Bank is now gearing up to become more effective in the leasing business.
According to its CEO, Mr. Ananda Wehella, two steps are to be taken immediately in developing the Bank’s services. On the one hand the Bank would be opening more branches beginning next month and on the other increase its loan capital by the issue of Debentures to the value of Rs. 150 million.
Mr. Wehella is confident of the debentures being taken up by investors. It is being issued on a four year term and the interest rates will be 13.5 per cent. With the interest being paid on a quarterly basis the effective rate will be 14 per cent.
In the meantime the Bank is negotiating for the purchase of the troubled T.A. Securities (Pvt) Ltd. This would bring the People’s Merchant Bank into the Securities business as well.
T.A. Securities came up for sale when its Malaysian partner TA Enterprise Bhd dumped its 40 per cent holding in the company.
Following this TA Securities went up for sale but an earlier bidder was rejected by the SEC due to inexperience in the broking trade. The local owners of TA are the Serendib Group.
In the meantime, Mr. Wehella told The Island the debenture capital will be used for leasing and developing of business in the next four years. As such there would be no undue risks in the use of the additional money.
He said the People’s Merchant Bank was continuing its discussions with TA which is expected to be finalised shortly. "After all we can’t keep them waiting for long" he added.
The issue is being guaranteed by the Peoples’ Bank, the Hatton National Bank and the DFCC.
Both DFCC and the NDB have been given approval by the Securities Exchange Commission to commence Stock Broking activities.
Long Term Loan heralds new phase of development for Sri Lanka Telecom
The largest ever raising of debt capital in the domestic market by a Sri Lankan corporate body, was successfully achieved on December 30th 1998 when Sri Lanka Telecom Limited (SLT) entered into an agreement with a consortium of nine banks for a Five Years, Syndicated Term Loan Facility of Rs. 4.1 billion. The consortium is led by the Bank of Ceylon and the National Development Bank, each contributing Rs. 1.0 billion. Other members of the consortium are the National Savings Bank (Rs. 450 million), Sampath Bank (Rs. 400 million), Citi Bank (Rs. 300 million), Commercial Bank (Rs. 300 million), DFCC Bank (Rs. 300 million), Seylan Bank (Rs. 250 million) and People’s Bank (Rs. 100 million). The facility was arranged by DFCC Bank as Lead Arranger and Citi National Investment Bank as Co-Arranger. Bank of Ceylon, as the Agency Bank for the facility, will administer the loan.
The funds provided under this facility will part finance the capital expenditure to be incurred on a fast track development and expansion programme — one of the first undertakings by the newly privatised SLT. This programme will be carried out with the objective of more than doubling the network of direct exchange lines to over 600,000 by the year 2000. SLT was privatised in August 1997 with the sale of a 35% equity stake and transfer of management control to Nippon Telegraph and Telephone (NTT) of Japan SLT had about 280,000 lines in service at the time NTT took over management control. This was increased to around 460,000 lines by December 1998 clearly indicating the degree of commitment to the development of the company by the new NTT management.
In addition to internally generated cash, SLT also finances its capital expenditure from foreign Supplier’s Credit facilities and long term concessionary loans from multilateral agencies such as the World Bank, ADB and OECF of Japan. While these will continue to be the major foreign sources of finance, the rapid pace of development and the magnitude of the capital expenditure to be incurred, has made it necessary for SLT to diversify its financing options and consider other alternatives. The syndicated Rupee facility raised from the domestic market represents the successful outcome of this strategy.
Besides sheer size, the facility is also a landmark transaction in that it is the first ever, long term Rupee based borrowing from the domestic capital market to be carried out by SLT. Moreover, from the point of view of the Arrangers — the Investment Banking Division of DFCC Bank and Citi National Investment Bank, the loan syndication represents the largest such investment banking deal ever concluded in Sri Lanka.
S. K. Wickremesinghe elected Chairman, NDB
Former High Commissioner to the UK, Mr. S. K. Wickremesinghe, was unanimously elected as Chairman of the National Development Bank (NDB) at the Bank’s Board Meeting in January ‘99. This is a non-executive appointment, and Mr. Wickremesinghe takes over from Dr. Nimal Sanderatne, who completed his four-year term in ‘98.
One of the most senior figures in the private sector, Mr. Wickremesinghe is no stranger to private enterprise. He holds a degree in Physics and began his career at ICI. He rose to the post of Chief Executive and Chairman of Chemical Industries in 1966, and continued as non-executive chairman from 1980 to 1995. During his career, he has also held the posts of Chairman of Ceylon Tobacco Company, CTC Eagle Insurance Company, Commercial Bank of Ceylon, Coates Lanka, Chemanex, Hayleys, Jetwing Hotels, and several other companies, as well as Director of the Singer Group, before resigning from all private sector posts to take up his diplomatic posting in February 1995.
SK, as he is commonly known by friends and colleagues, was most recently seen giving a much-needed facelift to the image of Sri Lanka in the UK. The plethora of media opportunities he created to promote Sri Lanka, was a typical indication of the dynamism he brought to the post. His role as High Commissioner was particularly important, as the Sri Lanka’s exports to the UK are growing at 12-15% a year, and the country remains a major source of tourists for Sri Lanka.
Mr. Wickremesinghe has also had significant involvement at a national level, having taken active roles in the National Education Commission, and the Wanasinghe Admini-strative Reform Commi-ssion. In 1978 he chaired a committee set up by the finance minister in consultation with the World Bank to eliminate bureaucratic controls affecting the private sector in Sri Lanka. It was considered the first step in dismantling the command economy of old and transforming the country.
He has also been a member of the Board of Governors of SLIDA, the Security Exchange Commission, and the Board of Governors of the Postgraduate Institute of Management of the University of Sri Jayawardanapura, and was a trustee of the Employers Federation of Ceylon.
NDB’s Director/Gen-eral Manager, Mr. Ranjit Fernando said he was very pleased about the appointment, adding the Bank would surely benefit from Mr. Wickremesinghe’s wide-ranging experience in both the public and private sector. His stature at a National level and in the corporate world would also increase NDB’s market prestige and add to the strategic vision and flair of the Bank.
Expressing his enthusiasm about his latest appointment, Mr. Wickremesinghe said, ‘I am looking forward to my new role as Chairman of NDB, which, as Sri Lanka’s largest single source of long term finance, plays such an pivotal development role in the country.
Exchange Rates The Central Bank's Spot Rates for transactions with Commercial Banks announced on the morning of January 27th, 1999 were as follows:
Buying Selling 100 US Dollars Rs. 6738.93 Rs. 6875.07 The approximate middle exchange rates of following currencies calculated on the basis of cross rates quoted by Gulf International Bank, Bahrain as it appeared in Reuters Financial Information System.
Saudi Arabia Riyal Rs. 18.15 Bahrain Dinar Rs. 180.57 Kuwait Dinar Rs. 225.81 Qatar Riyal Rs. 18.71 UAE Dirham Rs. 18.54 Oman Riyal Rs. 176.82 The European Commission Locking Rates of 11 member countries that came into existence from January 1st, 1999 as are follows.
Belgeam Franc 40.339900 German Mark 1.95583 Spanish Peseta 166.386000 French Franc 6.55957 Irish Punt 0.787564 Italian Lira 1936.27000 Luxemberg Franc 40.339900 Dutch Guilder 2.20371 Austrian Schiling 13.760300 Portuguese Becude 200.48200 Finnish Markka 5.945730 The maximum and minimum Average Weighted Prime Lending Rate (SWPLR) & (LPR) during the week ended January 22nd, 1999 by all commercial banks were 12.5 per cent and 14.3 per cent respectively.
The Average Weighted Deposit Rate (AWDR) of Commercial Banks for the month ended December 31st, 1998 was 9.2 per cent.
* Unit Trust Prices
Comtrust Equity Fund
Manager's Selling Price Rs. 5.29 (per unit) Managers Buying Price Rs. 4.96 (per unit) National Equity Fund
Manager's Selling Price Rs. 8.04 (per unit) Managers Buying Price Rs. 7.54 (per unit) Namal Growth Fund
Manager's Selling Price Rs. 8.84 (per unit) Managers Buying Price Rs. 8.68 (per unit) Namal Income Fund
Manager's Selling Price Rs. 10.71 (per unit) Managers Buying Price Rs. 10.59* (per unit) Rs. 10.70** (Ex.div.per unit) * After deducting exit fees
**Without deducting exit feesCeybank Unit Trust
Manager's Selling Price Rs. 5.94 (per unit) Managers Buying Price Rs. 5.56 (per unit)
Ceybank Century Growth Fund
Manager's Selling Price Rs. 8.42 (Ex.div.per unit) Managers Buying Price Rs. 8.26 (per unit)
* After deducting the relevant exit fees applicable.
Pyramid Unit Trust
Manager's Selling Price Rs. 5.91 (per unit) Managers Buying Price Rs. 5.51 (per unit)
* Ex Dividend Price
Eagle Gilt Edged Fund
Manager's Selling Price Rs. 11.24 Managers Buying Price More than one year Rs. 11.23 Less than one year Rs. 10.12* Eagle Income Fund
Manager's Selling Price Rs. 11.18 Managers Buying Price More than one year Rs. 11.17 Less than one year Rs. 11.06* Eagle Growth Fund
Manager's Selling Price Rs. 8.53 Managers Buying Price More than one year Rs. 8.18* Less than one year Rs. 8.10* * After deducting exit fees applicable
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