Sunday, April 29, 2012

NSB pays top price to acquire 12% of TFC

The National Savings Bank Friday acquired nearly 12 per cent of The Finance Company PLC (TFC), the country’s first established finance company, paying slightly over Rs. 357 million at a price of Rs. 50 per share – Rs. 20 a share above the prevailing market, to acquire some large blocks from four shareholders in the company’s top twenty list.

 The sellers are believed to be Dinal Wijemanne, CEO of Taprobane Securities, a Colombo stockbroking firm, Rayynor Silva, the brother of Duminda Silva, MP, of ABC Radio and two smaller shareholders, Messrs. N Perera and A.A.Y. Perera.

Wijemanne and Silva each owned 2.9 million shares ( 4.8% of TFC) while the two Pereras owned 669,700 shares each (1.11%).

According to the last published unaudited financials of the company for the period ended Dec. 31, 2011, TFC had accumulated losses Rs. 9.4 billion in its books and negative net assets per share of Rs. 23.57, a slight improvement from minus 23.65 a year earlier.

The company had posted a small profit of Rs. 15.85 million for the nine months to Dec. 31, 2011, up from a loss of Rs. 1.6 billion during the comparative period the previous year. This translated to a profit of 10 cents a share against a loss Rs. 78.78 a year earlier.

Analysts noted that TFC which took a heavy blow from the Golden Key collapse had total assets as at Dec. 31, 2011, of Rs. 21 billion and liabilities Rs. 24.23 billion.

Dr. T. Senthilverl through three accounts is the top shareholder of the company with nearly 20.7% while Ceylinco Investments held 11.04%. Mr. Lalith Kotelawela has a personal stake of 0.87% and is the 16th largest shareholder.

The state sector is also in the top twenty shareholders’ list through the EPF (8.43%) and Bank of Ceylon/Ceybank Unit Trust (5.19%).

Some analysts said that TFC owns a valuable land bank and the knock-on effect of the Golden Key collapse is wearing off. However the premium the NSB paid for the shares have raised eyebrows.

"It’s a 60% premium and the deal was struck at the Rs. 50 price when the market was at Rs. 30,’’ one analyst said.

source -

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