Ceylinco to sell the Model ‘Ceylinco City’ in Colombo

The Finance PLC to sell two iconic properties of the company at R.A. De Mel Mawatha

Sri Lanka’s oldest Golden financial power house, Ceylinco owned The Finance Company (TFC) PLC which had been in the forefront of creating confidence in country’s finance industry continuously for four generations from Great Grand Fathers’ to Grand Sons has recently call for sealed offers to sell two iconic properties which are the benchmarks of the company.

In a recent advertisement in weekend news papers island nation’s oldest finance company The Finance Company (TFC) PLC had invited for offers to outright purchase of two commercial properties, including its head office at No. 55, R.A. De Mel Mawatha, Colombo 04 and No.9A, De Fonseka Place, Colombo 04 amidst a recent secondary offer by the company to raise funds through a public share issue which is offering 40 million ordinary voting shares at Rs.40 per share.

The four storey commercial building property at No.55, R.A. De Mel Mawatha is built on a 72.65 perches land covering 17,800 square feet with ample parking facilities added with access to two road fronts including Gower Street. The other two storey commercial building covering 2500 square feet is built on 13.75 perches land which is just 25 meters from R.A. De Mel Mawatha and 50 meters from Galle Road, in Colombo.

Accordingly any interested party could send their offers titled ‘Offers for the purchase of Commercial Property’ indicating the either property name out of two on the top left corner of the envelope to reach the company’s Assistant General Manager-Administration before the noon of 28 January 2011.

The advertisement further said that prospective buyer should deposit a refundable fee of Rs.250,000 in cash with  TFC, prior to obtaining the title documents of each property while once the buyer is accepted; the buyer should pay 25% of the offer within two working days and the balance with next 14 days whilst the refundable deposit will not be refunded at an instance where buyer delays the full payment of the property.

R.A. De Mel Mawatha which was formerly known as Duplication Road was the central hub Sri Lanka’s former most diversified conglomerate Ceylinco Consolidated, where many head offices of Ceylinco subsidiaries were located including Chairman Lalith Kotelawala’s house and Ceylinco Consolidated head office which was also the consular office of Honorary Consulate for Singapore.

Many Sri Lankans arguably called R.A. De Mel Mawatha as ‘Future Ceylinco City’ as many subsidiaries such as Ceylinco Consolidated, Ceylinco Shriram, Ceylinco CISCO (Now CERTIS Singapore), Ceylinco Fast Cash, Golden Key Credit Card Company, The Finance Co. PLC, Ceylinco Building Society, Lalith Kotelawala’s House at No.28, Elibank Road, American National College (ANC) are all housed in the close proximities of the Road whilst many ‘Big Properties’ at R.A. De Mel Mawatha was once owned by Ceylinco Group.

However, as at today only Punarjeeva Karunanayake advised by Jagath Alwis is been able to carry out Ceylinco’s Multi Million Education business with ANC and Wycherley International School  while securing some of the Premier R.A. De Mel Mawatha properties owned by Ceylinco.

While its main properties are up for sale The Finance Co. PLC had started issuing 10% of the value of its deposits by way of non-voting shares to company’s depositors due to the collapse that resulted after Ceylinco owned Golden Key shutting down its operations without paying back its Rs.26 billion worth depositors.   

Amidst billions of losses The Finance PLC to be acquired by NSB, Bank Of Ceylon and LOLC?

High Exclusive sources close to Sri Lanka’s oldest former Golden Financial Power House, which is now fallen; The Finance Company PLC says that with its new Rs.40 per share 40 million Ordinary Voting Shares Secondary IPO in cards, that the Sri Lanka’s state owned banking Giants National Savings Bank (NSB), Bankers to the Nation; Bank of Ceylon (BOC) along with Rohini Nanayakkara headed Japanese Financial House Lanka Orix Leasing (LOLC) is bidding to buy major stakes of former Dickman’s Road Financier Lalith Kotelawala owned The Finance Company PLC (TFC).

“The deal will be concluded somewhere in September” our source from The Finance Company PLC added highlighting that The Finance Company expect a better future after the change of the ownership.

“Chairman Lalith Kotelawala will also sell his shares” source told CSE Leaks. However as per shareholders details of The Finance Company PLC, Lalith Kotelawala has 526,427 Ordinary Voting Quoted Shares of the company while another 46,232 Voting Shares of the company owned by Lalith Kotelawala are categorized under Unquoted shares.

As per 30 September 2010 The Finance Co. PLC’s (TFC) major stakes were owned by Ceylinco Investments Co. Ltd (37.13%), Jivaka Lalith Bhupendra Kotelawala (2.93%), Thuraton Investments Ltd. (2.37%), Pershing LLC S/A Auerbach & Grayson & Co. (2.2%), S.N.C.W.M.B. Kandegedera (1.84%) and Marian Martinus Christopher Jeyaraj Fernandopulle (Deceased Former MP of Sri Lankan Parliament) (1.7%).

Meanwhile, the financials of The Finance Co. PLC forecast that company’s income has drastically fallen from Rs.6.69 billion in 2009 to Rs.3.8 billion in 2010 whilst the company had consecutively reported losses amounting to Rs.2.56 billion in 2009 and further loss at Rs.4.28 billion in 2010 after the last profit at Rs.662 million in 2008. It also outlines that shareholders funds stand at negative Rs.2.91 billion while the new Secondary IPO is projected to rectify the negative worth of the company to positive Rs.3.6 billion with issued Secondary IPO public money.

The Finance Co. PLC’s Balance Sheet for the 30 September 2010 says that it has a ‘Mismatch’ between company’s assets and liabilities amounting to Rs.4.08 billion where as the public deposits from 2009 to 2010 has decreased by Rs.1.7 billion from Rs.25.74 billion (2009) to Rs.23.97 billion.

Accordingly, company’s assets are valued at Rs.24.9 billion which is lower than its total liabilities at Rs.28.98 billion.