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Tuesday, July 12, 2011

Abans FS goes for Rs 500 m Debenture issue

Ravi LADDUWAHETTY

Abans Financial Services Ltd Listed on June 27 and a subsidiary of Abans Ltd, will shortly go in for a Rs 500 m Listed Unsecured, Subordinated Debenture Issue with the prospect of going up to Rs 1 billion, if oversubscribed. The proceeds of the Rs 500 million Debenture will fund the branch expansion and also the launch of new products, while merging the synergies of the Abans Group which has 300 showrooms and 400 dealers.

“We are also looking at acquiring some finance companies and that is also under consideration with the Debenture Issue while growing our portfolio and our balance sheet,” Abans Financial Services Managing Director/ CEO Mano Alles told Daily News Business yesterday.

The Board of Directors has approved the issue to the value of Rs. 500 million and an Extraordinary General Meeting will be held on July 27 for the approval of the issue by the shareholders, she said.

The unsecured debentures will be issued at Rs 10 each in six different classes of instruments varying in tenors of 3- 5 years at rates of interest ranging from 11.39% to 13% payable monthly or annually.

In the event of oversubscription of all classes of instrument, the company will increase the maximum issue up to Rs 1 billion, she said.

Abans Financial Services will also seek the approval of the Colombo Stock Exchange to list the unsecured debentures on the Second Board. The aim of the issue will be for the expansion of branches. There are already nine operating with the Colombo head office. The others are Kandy, Gampaha, Galle, Ratnapura, Chunnakam, Dambulla, Kurunegala, and Anuradhapura,” she said.

“The tenth branch will be in Vavuniya for which we have already applied for the licence and licences will be applied for three more branches which will be for the second branch in Kandy which will be in the city centre along with Kotahena, Negombo and Wellawatte,” she said.

The new products which will be launched will be for pawn broking and micro-finance. She also said that Abans Financial Services will also exploit the resources of the parent company which has 300 countrywide showrooms and 400 dealers and that the company hopes to ride on the synergies. “This will be enable us to brand both the company and the debenture as well,” she said.
source - www.dailynews.lk