Shareholders approve GL’s ambitious investment plans in region
SHAREHOLDERS of Group Lease Plc, Asean’s leading digital finance firm, have approved the proposal to acquire shares in two finance firms in Sri Lanka and Myanmar as part of its ambitious plan to become a “world-class” player.
GL will acquire 22.3 per cent of Commercial Credit and Finance Plc (CCF), a leading finance firm |listed on Sri Lanka’s stock market, as part of the company’s plan to acquire a total of 30.0 per cent of CCF.
The acquisition of the remaining 7.7 per cent from its two shareholders, which does not involve connected transactions, was not subject to shareholders’ approval.
Such acquisitions will boost earnings growth for GL from the profit sharing of about US$7 million (Bt250 million) from CCF to be booked this quarter and more to come next year and beyond.
GL’s shareholders also approved the proposed acquisition of all of BG Microfinance Myanmar Co to tap the high loan demand in the newly opened economy, as well as the proposed issuance of debentures to finance the expansion.
Mitsuji Konoshita, chairman and chief executive officer of GL, said yesterday that the shareholders’ resolution, at the company’s extraordinary general meeting on Tuesday, to approve the proposed moves to expand the company’s presence in the digital finance markets in the Asean and Asian regions, will be |the new growth engine for the |company.
Wider scope
The acquisition will be made by Group Lease Holdings (GLH), a subsidiary registered on the Singapore Exchange, from Creation Investments Sri Lanka.
CCF comes with about one million customers and that will help GL to widen its geographical scope of operations beyond Asean to cover
Sri Lanka, a growing South Asian market.
The combined value of the investments in CCF will reach Bt2.51 billion.
CFF’s profit is estimated to be around $22 million this year and around $30 million next year.
The deal will also enable GL to access microfinance know-how, which can be used to apply for credit expansions in Cambodia, Laos, Indonesia and Thailand.
The Bt277.24 million acquisition of BG Microfinance Myanmar Co – executed by GL and/or through GLH – will allow GL to immediately expand its microfinance business in Myanmar, a country with a population of more than 50 million and huge loan demand.
The deal means there is no need for GL to go through the difficult process of applying for a microcredit business licence from the Central Bank of Myanmar.
Having been in operation for more than two years, BGMM has nearly 10,000 customers and a loan portfolio worth more than $1.2 million.
The new three-year convertible debentures valued up to $70 million in total will be placed with international investors.
Up to $50 million will be allotted to JTrust Asia, a strategic partner in Indonesia, to finance expansions and secure working capital for GL’s digital finance business.
Up to $20 million will be allotted to Creation SL, a partner in Sri Lanka, to raise funds for continued expansion.
The debentures will be convertible at B70 per share.
