Published : 7:56 am January 1, 2014 | 264 views | No comments so far | | E-mail to friend
Industry giant People’s Leasing and Finance Plc (PLC) has received a fresh boost for the New Year, by securing US$ 50 million syndicated loan at very attractive terms from the Middle East.
Arranged and partly funded by Emirates MND Bank, the two-and-a-half year syndicated loan saw two other Middle East banks – PJSC of United Arab Emirates and The Commercial Bank of Qatar – also contributing.
The $ 50 million financing is the second foreign facility that the PLC successfully secured in 2013. First was a $ 10 million one-year facility entirely financed by Emirates MND Bank.
Both exercises were pursued following the support extended by the Government’s 2013 Budget.
PLC Chief Executive Officer D.P. Kumarage told the Daily FT that funds had already been received and pricing was “highly attractive”.
He said that $ 50 million would be used to finance PLC’s working capital and expand business which has been robust so far in the 2013/14 Financial Year despite difficult conditions.
Kumarage said the successful conclusion of the latest foreign financing was a major boost for PLC’s profile as well as its international standing.
“PLC’s attractiveness among foreign financiers has significantly improved. The latest $ 50 million fund raising, along with new confidence won, will herald a new era for the company in terms of diversifying its funding base,” PLC’s CEO emphasised.
Being the highest-rated Non Bank Financial Institution in the country in addition to being the only institution to have two credit ratings by international firms, Kumarage said PLC, a 75%-owned subsidiary of People’s Bank, has been able to source funds locally at much lower rates too.
“This,” he said, “has enabled PLC to pass on the benefit to customers with attractive terms for leasing and other facilities.”
In the first half of FY14, PLC Group saw net interest income grow by 19.3% to Rs. 4 billion whilst total operating income grew by 13% to Rs. 5.6 billion. Net operating income improved by 6.5% to Rs. 4.94 billion. Revenue from leasing business grew to Rs. 9.8 billion in the first half of FY14 from Rs. 8.47 billion a year earlier. Profit from leasing business was maintained at Rs. 1.87 billion, similar to the first half of FY13.
With operating expenses rising by 15% to Rs. 2.6 billion, PLC’s Group operating profit before VAT however was down marginally by 1.8% to Rs. 2.28 billion. Net profit for the first half was Rs. 1.46 billion almost same as a year earlier which was Rs. 1.47 billion. PLC’s total assets grew by 3% to Rs. 104 billion as at 30 September 2013 from March 2013. Liabilities grew by 2.5% to Rs. 85 billion.
In early 2013, PLC also raised Rs. 6 billion via debentures whilst plans to go for a five-year international bond to raise $ 150 million was shelved due to unsettled global market conditions at that time.