Depositors of the defunct Ceylinco entities, Finance and Guarantee Real Estate Company (FGRECL) and Finance and Guarantee Property Developers (FGPDL) are in for a new year bonanza as a consortium of local and foreign investors have come forward to pay back encumbered depositors.
The main investor, Chairman, NLH Holdings (NLH), Don Duminda Mayadunna, told Daily News Business that both the Central Bank and the Supreme Court had given the green light to find an investor for these two companies two years ago.
The Central Bank had proposed that depositors of FGRECL and FGPDL shall be eligible to receive a minimum of 61% and 51% respectively on the principal outstanding on deposits.
“We have taken a decision to completely settle the 1,500 depositor’s claims for Rs. 7 billion by way of offering them cash and sharers. This will start from end of December 2018 and would be completed in less than two years.”
He said that their restructure plan has been already given to KPMG and the Ministry of Finance too is backing them.
“Our company has previously executed a turn-around strategy under similar circumstances, undertaking a similar approach, objective, and process outlined herein and we already have restructure four of the Ceylinco companies, that included NLH Holdings Pvt Ltd, Nations Building Society Ltd (The only Building Society registered under the National Housing Act) Ceyhomes Credit & Investments Pvt Ltd and Ceylinco Prosperity Pvt Ltd.
After taking over these four companies, 42 out of 60 installments under the agreed repayment amounts have been returned to depositors.
“Also, non-voting shares of equivalent value has been issued for the remainder of the deposit value. Plans are underway to list the company so that depositors have the opportunity to realise further value through their ownership in the company equity.”
“We are a financially stable company and NLH holds an asset base of Rs. 3 billion of which 25% is comprised of cash and cash equivalents and liquid assets.
“Over Rs. 1 billion in an additional pool of shareholder capital is available to invest into target mergers and acquisitions.”
“NLH will be forming a JV with ZRA Holdings Pvt. Ltd, which will be listed shortly to carry out the investment and restructuring of FGRECL and FGPDL.
“A minimum of Rs. 500 million will be allocated as new capital infusion into FGRECL and FGPDL to help stabilise the company working capital requirement, rebranding initiatives, help complete ongoing projects, and most importantly, to help instill confidence and sense of security to affected depositors.”
He said that the both FGRECL and FGPDL have assets such as lands in key locations, incomplete buildings and also recoveries that have to be made.
“We have a business plan that would be implemented to maximize these assets.”
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