23 October 2020 12:00 pm Views - 424
Despite the transaction making little market overlap sense on the surface, it certainly hints at future strategic plans that will open doors to build one strong entity which will be safer for its depositors. It will also provide a pathway to enhance and strengthen its current capital position, complying with the objectives of the regulatory authorities.
The merger is also expected to enhance value through consolidating and administrating the operational infrastructures more efficiently while adding more value to all stakeholders, enabling the merged entity to emerge as a considerable force in the finance sector of Sri Lanka.
Commenting on this, Chandrin Fernando, CEO of Arpico Finance Company PLC stated that formalities on the merger with its major shareholder AMF have been on-going successfully. ‘The operational environment of the two companies is ready to proceed with the legal merger and it’s in progress.’
‘This will create a stronger entity in terms of capital and regulatory compliance and will enhance the commitment towards the depositors with accountability.’ Associated Motor Finance Company PLC CEO T.M.A Sallay added ‘We anticipate the merger with AFC to be completed very soon. This will undoubtedly improve overall synergies, leveraging on each other’s key strengths and competencies.
AMF acquired 94pct of shares in AFC in October 2014. Both the companies are regarded as two of the oldest finance companies in the country, achieving a consistent growth in a highly challenging and turbulent environment. AFC continues to rank as one of the leading licensed finance companies with the longest history in Sri Lanka with AMF following closely, claiming fourth position.
Established in 1951, Arpico Finance Company PLC with a track record of close to seven decades stands strong as one of the finance companies in the country. The company operates through 10 branches with its principal lines of business include finance leasing, mortgage loans, personal loans, and acceptance of time and savings deposits.
Associated Motor Finance Company PLC was established in 1962 and currently has a wide dealer network island wide offering leasing with a portfolio largely comprising of two-wheelers. The group also specializes in mortgage loans, personal loans, and acceptance of time and savings deposits. As of 31 March 2020, the Group Total Asset base was LKR 20.34 Billion and the Group Equity was LKR 2.06 Billion.
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