LOLC completes shares transfer of 3 finance firms to holding company LOLC Ceylon

LOLC Holdings PLC (LOLC) has completed the transfer of finance company shares to its fully owned subsidiary LOLC Ceylon Holdings Limited (LOCH) with a view to facilitate potential foreign investors to acquire minority stakes in the group’s finance companies.

Accordingly, LOLC last Friday in a stock filing announced that 2.35 billion shares owned by the group in LOLC Finance PLC (LOFC) amounting to 44.79 percent, 6.3 billion shares owned in Commercial Leasing and Finance PLC (CLC) amounting to 98.92 percent and 132.18 million shares owned in LOLC Development Finance PLC (NIFL) amounting to 55.55 percent were transferred to LOCH with the approval of the Securities & Exchange Commission of Sri Lanka (SEC).

However, individual or the collective transaction size or the prices were not disclosed to the market.

“The Related Party Transactions Review Committee of LOCH is of the view that the transaction is on normal commercial terms, and is not prejudicial to the interests of the Entity and its shareholder. The Related Party Transaction Review Committee is not obtaining an opinion from an independent expert prior to forming its view on the transaction,” LOLC 
Ceylon stated.

Last Friday, CLC shares were down by Rs.15 or 19.11 percent to Rs.66.10 per share at the market closure ending the week as the second largest company in terms of market capitalisation on the CSE. 

Meanwhile, LOFC shares were down by Rs.11.40 or 30.65 percent to Rs.25.80 per share and ended the week as the eighth largest listed company in terms of market cap.  Similarly, NIFL share was also down by Rs.44.25 or 8.85 percent to Rs.455.75 per share at market closure of last Friday and was the ninth largest listed firm on CSE in terms of market cap.

The move is part of LOLC Group’s global strategy to attract investors to the large finance companies under the ownership of the group in order to create a platform to enable potential investors to acquire minority stakes in them.  By attracting such investors, LOCL aims to build capabilities to support the finance companies to grow even further and offer an even better service to customers by introducing the latest technologies, technical know-how, and providing training for employees. Further, LOLC also plans to list LOLC Asia Private Ltd, the holding company of LOLC Ceylon on Singapore Stock Exchange by end of this year.