Nation Lanka Finance announces Rights Issue to raise Rs. 502 million

JayanthaPerera, ExecutiveDirector& CEO of Nation Lanka Finance PLC

Nation Lanka Finance (NLF) has announced a Rights Issue to raiseRs. 502 million to support the company’score capital requirement and ensureits compliance withregulationsthat have been stipulated by the Central Bank of Sri Lanka.  

The investment to increasecore capital will help improve the company’soverallliquiditywhilstsupportingitscontinuedoperationalgrowth and expansion. The proposedRights Issue willbeheld on the basis of 02:01 at Rs. 1/- per share, with a total of 502, 326, 522 ordinarysharesbeingoffered to existingshareholders of the company. 

The core capital base of the company in the financial quarter ending 30 September 2015 wasrecorded at Rs. 72 million and giventhat the Rights Issue isfullysubscribed, the capital base by 31 March 2016 isexpected to increase to Rs. 747 million with the expectedoperational profits (The minimal capital requirement set by the Central Bank of Sri Lanka isRs. 400 million).

JayanthaDharmadasa, Chairman of Nation Lanka Finance PLC

The company’s financial performance in the current year has grown from strength to strength, with a strategic turnaround, which has had a positive impact of the company’s overall operations whilst yielding an increase in revenue and profits. Nation Lanka Finance recorded a revenue of Rs. 1.04 billion in H1 of 2015/2016, a 90% increase over the previous year.  The company also declared a profit before tax (PBT) of Rs. 126 million during the period under review, a notable improvement over the loss of Rs. 176 million that was incurred in the corresponding period of the previous year. 

Nation Lanka Finance has rapidly evolved into a robust financial services provider and has made significant headway in reaching new customer segments and growing its core lending and microfinance products.  Additionally, the company has worked tirelessly to reduce its non-performing portfolio and has set stringent internal targets to minimize the negative impact of low performing products in its portfolio. The company is also making an ongoing effort to ensure that all aspects of its operations and service offerings are on par with industry norms and standards. 

Commenting on the company’s upcoming Rights Issue, JayanthaPerera, CEO of Nation Lanka Finance stated, “The capital infusion provided by this Rights Issue will help Nation Lanka Finance to boost its performance in the current financial year and will strengthen the company’s core capital base, whilst ensuring its compliance with the stipulated Tier 1 capital adequacy ratio set by CBSL. This issuance will augur well for the company’s continued growth and will enable us to retain our current position of profitability. Our focus on compliance is also part of our long-term strategy to establish Nation Lanka Finance as a reliable, dynamic and leading force in the financial services industry.”

Commenting on how the Rights Issue would be handled in the event of an undersubscription, Pererastated, “We are confident that this will not be the case. However, in the event that the Rights Issue is not fully subscribed, the company will take the shortfall into consideration and consolidate on profitability to strengthen the core capital base and gradually improve liquidity. This Rights Issue was recognized as an important part of our expansion and was unanimously approved at the EGM, which was held on 10th February 2016. As we look ahead to the future, Nation Lanka Finance will continue to establish itself as an organization whose Board of Directors and Management remain completely committed towards ensuring shareholder wealth maximization.”

In all of itsendeavours, Nation Lanka Finance remains dedicated to serving the nation and its people. The company offers its customers a diversified range of practical financial products and services, which are delivered in an efficient and professional manner. Nation Lanka Finance is licensed and regulated by the Central Bank of Sri Lanka and has a rich heritage extending over 28 years. The company is committed to shareholder value maximization and has built its reputation on strong connections with local communities and stakeholders. Over the years, NLF has gradually expanded its network and now has a strong presence in 25 location points across Sri Lanka. Nation Lanka Finance is committed to ensuring that customers from all communities and walks of life, can access the company’s services and benefit from elevated standards of living.