Singer Finance PLC (SFIN) will raise Rs.551 million by way of a rights issue of ordinary shares.
The company in a stock exchange filing said that they intend to utilise the proceeds of the fund raising mainly to further strengthen the equity base of the company and thereby improve the capital adequacy.
SFIN’s core capital as at June 30, 2017, was reported at Rs 2.8 billion. The proposed capital enhancement would facilitate SFIN to increase its present core capital to Rs 3.3 billion while maintaining an adequate buffer over the minimum core capital requirement of Rs 2.5 billion stipulated by the Central Bank of Sri Lanka by 2021.
The strengthening of capital base would enable the company to maintain healthy capital adequacy levels to leverage the balance sheet and thereby enhance its lending portfolio and improve the profitability of the company.
The second objective is to part finance the growth in the loan portfolio of the company.
The company intends to utilize the entire proceeds of the issue to expand its loan portfolio in the ordinary course of business. During first quarter of FY 2017/18, the average disbursement made by the company was Rs 1.044 billion per month compared to its budgeted monthly disbursement of Rs 1.049 billion. The funds raised via this issue would be disbursed to clients predominantly under product segments of the company such as leasing.
0 comments: