THURSDAY, March 28, 2024
nationthailand

Group Lease buys into Lanka finance firm

Group Lease buys into Lanka finance firm

GROUP Lease, a microfinance company listed on the Stock Exchange of Thailand, is investing Bt2.5 billion to purchase a 29.99-per-cent stake in Commercial Credit & Finance (CCF), a Sri Lankan financial group.

The acquisition marks GL’s first major expansion outside Asean after the company expanded its footprint into Cambodia, Indonesia and Myanmar.
In Myanmar, CCF shareholders last month agreed to sell a 71.9-per -cent stake in BG Microfinance Myanmar (BGMM) to Group Lease, GL chairman and chief executive Mitsuji Konoshita said.
GL’s board of directors approved the acquisition of the remaining 28.1 per cent from BG Investments, BG International, BG Capital and CCF. The entire share purchase cost Bt277.24 million.
GL also wants to acquire 100 per cent of the shares in BGMM, a promising microfinance and leasing company in Myanmar – a move it believes would enable it to expand it business fully in that country in the future.
The transaction will be conducted by Group Lease Holding, a wholly owned subsidiary incorporated in Singapore as a holding company.
In Sri Lanka, the microfinance sector is mature but GL sees a growth opportunity there and it aims to tap that through its e-payment know-how to support CCF.
Under Sri Lankan regulations, if an investor wants to acquire a 30-per-cent stake in a Sri Lankan firm, the investor has to make a tender offer, but GL opted to buy the 29.99-per-cent stake instead. 
GL has the right to acquire the remaining stake if CCF’s major shareholders decide to sell those shares, as GL has first refusal right for the existing shares as stipulated in the shareholder agreement.
 CCF provides a variety of products and services. It is registered under the Finance Business Act and the Finance Leasing Act. The products and services include leasing and hire purchase, loans, microfinance, factoring, gold loans, real estate and land sales, and investment advice.
CCF has total assets of US$500 million (Bt17.3 billion), of which $400 million is from its leasing business. GL expects to book a profit of about $7 million from being a shareholder in CCF in the fourth quarter.
The CCF deal will result in the acquisition of a new microfinance methodology GL says will benefit its activities in Sri Lanka and all Asean markets where it wants to expand. 
GL is also willing to bring additional value to CCF with the development of a leasing and digital-finance model in Sri Lanka. 
CCF is looking to expand into other industries such as banking and insurance, which could add more synergies to GL in the coming years.
GL said it would benefit from its investment in a profitable, dynamic and well-established company in Sri Lanka.
 
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