Nestle Lanka opts for US$ 45mn inter group loan to secure this year’s forex requirements

Nestle Lanka PLC, the local unit of the Swiss food giant, is to borrow US$ 45 million from Nestle Treasury Centre-Middle East and Africa Ltd. (Nestle MEA) to cater to its foreign exchange requirements for this year.

It appears that the move comes in the wake of the shortage of dollars in the domestic market, as Sri Lanka is currently facing a full-blown foreign currency exchange crisis amid the drying-up of some key foreign exchange inflows and large external liabilities.

“Related Part Transactions Review Committee of the company has reviewed the proposed Inter Group Loan of US$ 5 million and recommended to the Board that the terms and conditions pertaining to the proposed Inter Group Loan of US$ 45 million is at arm’s length at the meeting held on the January 12, 2022,” a filing by Nestle Lanka said.

“Accordingly the Board of Directors at their meeting held on January 12, 2022 decided to recommend to propose a resolution in terms of Section 9.1.1 (a)(i) of the Listing Rules at the Extraordinary General Meeting (EGM) scheduled to be held on February 15, 2022 at 3.00 p.m. at the Head Office of Nestle Lanka PLC via Microsoft Teams platform,” the filing added.