Prabodha Yagoda wrote:Is there any update regarding this by now?
Crisis-ridden, Edirisinghe Trust Investment Finance Ltd (ETIFL) a licensed non-bank finance institution, will be resurrected with a capital infusion of US$17 million by a Singapore-based investment fund, official sources revealed.The EAP Group has entered into a deal with Blue Summit Capital Management Pvt Ltd to sell some of its major subsidiaries to this Singaporean firm at a price of US $75 million in a bid to protect the deposits of over 35,000 depositors of ETIFL and Swarnamahal Financial Services PLC (SFS), a top official source closely connected to the deal told the Business Times.
The Singapore fund has already remitted US$17 million to deal with ETIFL’s liquidity issue and eroding capital, a senior Central Bank (CB) official confirmed.
According to a due diligence conducted by relevant parties, the gap indicated in ETI’s balance sheet was Rs. 17.5 billion at end-March 2017. This company has a 90 percent stake in SFS which has a negative book value of Rs. 1 billion.
EAP is expected to receive $43 million by the end of April and the balance $15 million by mid May this year to finalise the deal of exiting the ownership of their subsidiaries namely SFS, EAP Films and Theatres Pvt Ltd, EAP Broadcasting and Swarnamahal Jewellers, the official source said.
Only a 40 per cent stake in EAP Broadcasting, which owns the Swarnavahini TV station and several Sinhala and English radio channels, can be sold due to state restrictions imposed on foreigners to hold shares in media companies. The balance 60 per cent will be retained by the EAP Group. The CB restricted the withdrawal of maturing deposits and renewal of such deposits of ETIFL and SFS for six months with effect from January this year, and placed the companies under a 3-member expert panel comprising former CBAssistant Governor Sepala Ratnayake, former Bank of Ceylon (BoC) Senior Deputy General Manager P.A. Lionel and former BoC Assistant General Manager H.M. Thilakarathne.
From that day onwards, EAP Group has tried to find an investor to infuse fresh capital into two finance companies, the official said. Earlier EAP’s negotiations with a controversial Malaysian-based broker, who was once stopped at the Colombo airport with a large amount of undeclared foreign currency, and also linking a Singapore firm
Straits Grid Pte Ltd, didn’t work. It was after this that the EAP group was approached by another Singapore firm through another broker. The earlier negotiations also included a stake to be taken by UK based Lyca Group, owned by Sri Lankan-origin Allirajah Subaskaran, a high profile player in the mobile network space operating in 21 countries worldwide. The Lyca founder is a powerful financial backer of Britain’s Conservative Party.
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