The troubled non-bank financial institution, The Finance Company PLC (TFC) has received liquidity support from the Central Bank, under the second phase of the company’s restructuring.

The liquidity support was extended under the Sri Lanka Deposit Insurance and Liquidity Support Fund, a scheme set up to provide support to non-bank financial institutions with liquidity issues.The Central Bank said the current TFC Chairman Dr. S.H.A.M. Abeyratne and Managing Director Aruna Lekamge this week signed an agreement with the CBSL to obtain the said financing.

The Monetary Board had given its approval to the long term concessionary loan facility, which is to help TFC become more liquid under a new business model.“TFC is now expected to further consolidate its progress towards reaching a stable, sustainable and profitable level that would enable the company to attract new equity capital through a suitable future share issue,” the Central Bank said in a statement.The Central Bank is hoping that finding a new strategic investor would help the company come in accordance with the financial sector consolidation plan on its own terms.

The consolidation initiative calls for nonbanking financial institutions to increase their assets to over Rs.8 billion, and increase their core capital to Rs.1 billion by January 2016, and further to Rs.1.5 billion by January 2018.TFC, a former Ceylinco group company got into trouble in 2009, with the collapse of key finance companies within the Ceylinco group. As at September 30, 2014, TFC had total assets worth of Rs.18.1 billion, an increase from Rs. 17.48 billion yearon-year (yoy) through acquisition of investment properties, but a negative equity of Rs. 9.33 billion, a further decline from Rs. 8.25 billion yoy.The company also reported a negative net asset value per share of Rs.58.16, increasing from Rs.51.41.For the quarter ended September 30 (2Q15), TFC’s net loss widened 17 percent yoy to Rs.454.4 million. For the six months, the net loss widened 19 percent yoy to Rs.1.08 billion.