Despite last week’s reports on German investors showing keenness to invest in Sri Lanka’s registered finance industry with Rs 5 billion capital infusion into the failed Central Investment and Finance Co. Ltd (CIFL), the company said that insufficiency of its current asset position has delayed finalizing the matter.
Accordingly, in a disclosure to the Colombo Stock Exchange (CSE) on Monday, CIFL said that the Central Bank of Sri Lanka has not confirmed the possibility of granting a loan amounting to 50% of the German investment through the Liquidity Support Scheme (LSS) as expected earlier.
The statement further noted that it was because of the non-availability of adequate assets at CIFL to provide necessary collateral to the loan.
The earlier statement said that further negotiations are ongoing and German investors were supposed to sign a Memorandum of Understanding (MoU) during their stay in Sri Lanka. A delegation from Vandell Financial Services SA, Germany arrived in Sri Lanka partly with the intention of investing in and bailing out the local finance company – CIFL where the German investors were supposed to infuse Rs. 5 billion.
The reports also said that the delegation is expected to be in Sri Lanka for several days and if all goes well the investor had agreed to pay 50 per cent outright of the depositors’ money.
CILF was initially registered as a public limited liability company on July 3, 1968. Subsequently it came under the ownership of Deepthi Perera of ASPIC Group in 2004. It became a public liability company in July 2011 and is currently listed on the CSE.
Following years of alleged mismanagement, according to the company’s December 2012 financials, the public deposit liability stood around Rs. 3.5 billion with approximately 4,200 depositors.