Wednesday, October 5, 2022

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Swarnamahal Finance revives in a merger with SMB Leasing

  The Monetary Board of the Central Bank (CB) has granted approval in principle to issue a finance business license to Ravi Wijeratne-controlled SMB Leasing PLC, upon settling the depositors’ liabilities and purchasing assets worth Rs.425.32 million of the defunct Swarnamahal finance company. 

This has been done under the Master Plan for Consolidation of Non-Bank Financial Institutions of the Central Bank of Sri Lanka,” SMB Leasing announced in a disclosure filing with the Colombo Stock Exchange (CSE), yesterday.

SMB Leasing PLC is a specialised leasing company established in 1992. Following a recent rights issue, Wijeratne became the controlling shareholder of the firm.

Meanwhile, the CB officials noted that the agreement between the CB and SMB Leasing is in line with the CB’s ongoing programme of reviving the defunct finance companies  as well as consolidation of the NBFI sector. 

SMB Leasing PLC is set to buy Rs. 425 million worth of assets of Swarnamahal Financial Services PLC (SFSP), enabling the latter to settle outstanding deposits. 

The move follows the Central Bank, in principle, approving SMB Leasing (SMBL) to transfer Rs. 425.3 million to SFSP to settle outstanding deposits. 

 In lieu of the transfer of funds, SFSP is to transfer the unencumbered title of three properties to SMBL. Thereafter, the license of SFSP to conduct finance business is to be canceled. 

The properties, which SFSP will transfer ownership to SMBL, are 195.86 perches of bare land in Gangatennwatte, Angunawala, Kandy; 46 perches of land and building at 10, De Alwis Avenue, Mt. Lavinia, and three shops at the Ja-Ela Reality Plaza. 

In mid-December, SMBL said the Monetary Board of the CBSL granted, in principle, approval to issue a finance business license upon completing the pay-off of public deposits and purchase of certain assets of a finance company at Rs. 425.3 million. 

This was under the master plan for Consolidation of Non-Bank Financial Institutions of the CBSL. In the mid-December disclosure, SMBL didn’t disclose the name of the finance company.

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