The country’s largest non-bank financial institution has recovered from turmoil and is ready to make profits, however depositors would have to be patient before they are allowed to withdraw their funds in full. "The Finance Company which concluded a successful IPO which raised Rs. 3.6 billion now has now emerged out of turmoil," said it’s newly elected Non Executive Chairman, Preethi Jayawardana.
He said the company has several plans for it to once again become a profit making organization. However when asked when depositors would be able to regain their funds he said the company needed more time.
"Depositors had to wait for two years and they would have to continue to wait as the company is still planning out what needs to be done," Jayawardana said.
In contrast to his statement of deposit repayments, he said that the company had efficient funds to pay their bank loans which amounted to around Rs. 1.5 billion, provided banks would not revise their interest rates.
These loans are at much higher interest rates than the current market rates. The Finance Company is paying nearly 17 percent as interest for its bank loans, he said.
He said the company would be showing ‘Hoda hoda sellan eliwena jameta’ (the show will get better and more exciting as it goes on).
The company currently obtains an average deposit of Rs. 450 million per month and refunds have been assumed at Rs. 380 million. For the month of January, the deposit estimated Rs. 400 million," The Finance Company, CEO, K. J Yatawara said.
He stated that the refund on demand has significantly reduced as the depositors now have gained confidence in the company.
He told The Island Financial review that any depositor who entered the institute after July 2009 could obtain their funds on demand. However refunds on demand to depositors prior to that would not be able to do so for the moment as a mechanism was still being worked out.
He said the company has an asset base of Rs. 26 billion after the successful IPO last month and the single largest investor who invested Rs. 495 million, Dr. T. Senthilverl, has been appointed as a Non Executive Director.
The total asset base of the company as at 31 December 2010 was Rs. 23. 7 billion, while its total liabilities standing at Rs. 28.3 billion, its main stream of business, hire purchases, declined 30 percent to Rs. 2.9 billion from Rs. 4.1 billion.
The net interest income loss for the first nine months ended 31 December 2010 reduced 46 percent to Rs. 544 million from Rs. 1,007 million, as interest income declined 40 percent to Rs. 1,771 million from Rs. 2,965 million while the interest expenses increased 41 percent to Rs. 3,972 million from Rs. 2,316 million. Other income losses for the company declined 28 percent to Rs. 379 million from Rs. 530 million a year ago.
The net loss for the period declined 25 percent to Rs. 1.6 billion from Rs. 2.1 billion, the loss per share reduced 25 percent to Rs. 78 from Rs. 105 a year ago.
source - www.island.lk
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