Sri Lanka’s LOLC confirms US$ 603 million sale of controlling stake in Cambodian micro finance company
LOLC Holdings PLC of Sri Lanka has reportedly confirmed the mega US$ 603 million (around Rs. 11 billion) deal on the sale of its controlling stake in Cambodia’s largest micro finance company.
In a filing to the Colombo Stock Exchange on Monday (6), LOLC has reportedly stated that its subsidiary LOLC International Ltd. of Singapore on 6 January along with other minority shareholders of PRASAC Microfinance Institution Ltd. of Cambodia entered into a Share Purchase Agreement and a Shareholders Agreement with Kookmin Bank, the largest commercial bank in South Korea for the sale of PRASAC’s entire shareholding.
This is subject to receiving final approval from the National Bank of Cambodia (NBC) and the Financial Services Commission of the Republic of Korea. PRASAC is the largest microfinance institution in Cambodia, LOLC has noted.
Accordingly, LOLC International which holds a 70% stake in PRASAC is to receive US$ 603 million for the sale of its stake in two tranches and proceeds of the US$ 422 million is to be received upon receipt of approval from NBC and the balance US$ 181 million in 2022.
LOLC has further stated that PRASAC was its first foreign investment in 2007. The LOLC Group also operates microfinance companies in Myanmar, Philippines, Indonesia, Pakistan, Zambia and Nigeria including LOLC Cambodia PLC, the fourth largest microfinance company in Cambodia.
The local media has reported that the impending sale and announcement has shown investors taking positions on LOLC share for the past two weeks propelling the share price to record high and catapulting to sixth most valued company listed on the CSE last week from 11th place in end-November 2019.
OSL take:
The million dollar transaction confirmed by Sri Lanka’s LOLC is a clear indication of the strength and growth of the country’s private sector. The business conducive environment in the country and the ease of doing business environment in the country have helped the expansion of Sri Lanka’s private sector. The country’s economic growth propelled by Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have helped businesses grow in Sri Lanka. Foreign businesses exploring opportunities in Sri Lanka could look at the possibility of forming partnerships/joint ventures with local businesses.
| Article Code : | VBS/AT/20200109/Z_3 |