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Sri Lanka Ceylinco group to exit Seylan Bank
Sunday, 28 December 2008 - 12:28 AM SL Time
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Sri Lanka`s Ceylinco group will exit Seylan Bank, a licensed commercial bank, as part of a strategy to raise funds and repay depositors in a troubled group company, chairman Lalith Kotelawala said in a public statement.
Golden Key Credit Card Company failed to repay customers who had placed funds in the firm as a deposit for a credit card. Kotelawala who met customers on Tuesday promised to repay them.
`I have therefore now taken a decision to divest the investment in my beloved bank, Seylan Bank, which I founded 20 years ago and honour the debts of Golden Key Card holders,` Kotelawala said in a public statement placed in newspapers.
`I will be taking necessary steps to obtain permission from the relevant regulatory authorities in this regard.`
Kotelawala said Seylan is the third largest private sector bank in the island. The bank has over 100 branches.
LBO learns that discussions are underway to find a local or foreign bank to take-over Seylan.
Seylan Bank closed down 75 cents at 15.75 Friday, but analysts say a controlling stake would be worth much more.
Commercial banking licenses are also no longer issued and the minimum capital requirement for a bank is around two billion rupees.
`I have always believed in doing the right thing in life, however painful it may be,` Kotelawala said.
Seylan is Sri Lanka`s fifth-largest licensed commercial bank, accounting for 5.7 percent of banking system assets at the end of the financial year 2007, according to a Fitch Ratings report.
The Ceylinco group holds 23 percent of its voting equity while several employee share ownership trusts collectively hold another 27 percent of Seylan`s voting equity.
Seylan Bank has 43,560,000 Voting Ordinary Shares in issue which valued at the current price of 15.75 rupees a share would be worth 686 million rupees.
Seylan Bank had total deposits of 119 billion rupees and total assets of 166 billion rupees as at September 30, 2008 while total performing loans and advances were at 93.7 billion rupees, according to a stock exchange filing.
In July Fitch Fitch Ratings downgraded Seylan Bank`s national long term credit rating by one notch to `BBB+` which is still in the investment grade category.
The rating agency said at the time that the downgrade reflected the increased challenges faced by the bank in absorbing credit losses in a weakened economy with a relatively low capital cushion and profitability, and challenges in raising fresh equity capital.
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youbama
Joined: Dec 2008
Posts: 80
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 28 Dec 2008 01:00:45 GMT Report for Abuse
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| Bankrupt,They play with money.did not do nothing for innocent people. |
kiwikanga
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 28 Dec 2008 06:31:33 GMT Report for Abuse
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| Harry Jayawardena and his business empire in SL would be surely interested in buying Seylan, if they are not, THEN it could be a good indication that Seylan AND Ceylinco are in REAL trouble! |
Spetsnaz1
Joined: Jun 2006
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 28 Dec 2008 06:37:25 GMT Report for Abuse
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| Well it is bad that Mr.Kotalawala is selling Seylan itself.. but it is good for the GK depositors.. I heard Harry Jayawardene is trying his level best to buy it off.. also is Pan Asia... but from the looks of it will be a close call.. but I dont think seylan will close down either.. just change of ownership.. |
kiora
Joined: May 2006
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28 Dec 2008 06:51:46 GMT Report for Abuse
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| First step is separation so the company is now stand alone not a liability to the parent company. Good move from the Parent company .Second move ?? Fitch ratings are not worth the paper is written. |
soldier
Joined: Feb 2008
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 29 Dec 2008 06:21:24 GMT Report for Abuse
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Kiwikanga, Spetsnaz1,
Harry Jayawardena and his business empire in SL would be surely interested in buying Seylan
I heard Harry Jayawardene is trying his level best to buy it off
i dont think harry jayawardene will do that, becasue normally he go for the highly profited organizations. everybody knows though seylan is a leading bank, it's not profiting enough. if harry buy that. it will be the end of his legend:-)
Edited By - soldier - 29 Dec 2008 06:22:54 GMT |
Nidi
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30 Dec 2008 09:39:49 GMT Report for Abuse
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Following the Founder Chairman Deshamanya Dr. Lalith Kotelawela s press release of Saturday December 27, 2008, we would like to make the following clarifications to the General Public and our valued customers of Seylan Bank, as we have received inquiries in this regard.
What has been stated in the press release is that our Founder Chairman and Ceylinco Group have decided to divest Seylan Bank shares owned by Ceylinco Group so as to raise funds to honour the dues to Golden Key credit card holders. We emphasize that the intended sale is of the shares owned by Ceylinco Group to a potential reputed investor subject to the permission of the relevant regulatory authorities.
This is merely a transaction between Ceylinco Group as shareholders and a new acceptable investor.
It is further clarified that what is intended for sale are not the assets of the Seylan Bank, investments made by the bank or any shares owned by Seylan Bank. Further we wish to inform that Seylan Bank will not use the depositors funds to meet the obligations to Golden Key Credit card holders.
By deciding to sell the shares owned by Ceylinco Group, the Chairman and Ceylinco Group have displayed the commitment of Ceylinco to meet their obligations.
Seylan Bank is a licensed commercial bank which is regulated and supervised by the Central Bank of Sri Lanka . |
Nidi
Joined: Dec 2008
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30 Dec 2008 09:44:02 GMT Report for Abuse
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I think Media has made a big issue regarding this Seylan Bank problem.If the media keep on saying things like this definitly the customers will widthdraw their deposits from Seylan bank . Because of that the bank will collapse.
We love our Bank !
Our Bank is stable !
Lets Protect it !
Long Live Seylan!
Edited By - Nidi - 30 Dec 2008 09:45:51 GMT |
kiwikanga
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30 Dec 2008 23:51:13 GMT Report for Abuse
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Soldier
though seylan is a leading bank, it's not profiting enough
That is not the impression they create in the minds of the public. If what you say is correct then LK has been hoodwinking the public into enticing them to deal with Seylan, quite apart from GoldenKey. |
justman
Joined: Mar 2006
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 31 Dec 2008 16:58:24 GMT Report for Abuse
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Kiwikanga
If you are a successful business man it would be the most wisest thing not to panic the customers by talking negatively as revealing the bad side openly will lead to the eventual decimation of that company where nothing could be salvaged from that company.I still support by belief that Dr kothalawala is a Honorable honest man.Where are those nationalist monks and why are they not giving their 2 cents to bring the confidence back to this company?
Nidi
you must be a loyal employee of the company and my heart goes to you people.
I personally knew the founder of this company Mr Justin Kothalawala and his CEO Justin Silva who was an uncle of mine and I had my little office there which was 4E.Justin Silva was very reserved and strict and arrogant enough not to allow my car to be parked there calling me a pertinent person for me to be chauffeur driven at the age of 18 years and we became friends when I was about to leave for UK in 1966.I am grateful to those two and Upali Wijewardene who was then worked for Lever Brothers.We were all fire crackers on our own right and to lose us is a tragedy and the dirty politicans were responsible for this.
Because of my beginin and roots from that building and my respect to the two Justin's I would like to offer my valuable land in SL to Cylinco perhaps worth not less than 120 Million.Only a foreign investor could afford that kind of money.You can contact me through my niece Neelani.G (formerly of JWT).I don't want any interest or reward but give the equivalent sum in 5 years from now.I think Lalith knows her so is Mrs K of Cylinco.It's time that the patriotic people rally round our private sector companies that are really struggling to survive these harsh conditions created by the terrorists and politicans of all parties since our Independence.Unless we pull our socks up and think hard as to who to run the country we will be a doomed country.At present there is a election circus going on in Kandy and with the ever lasting restrictions created there with mobs running around how on earth could any company,any man or animal making a living?we are cursed with these idiots running our affairs, elected by equally idiotic people, and that does not mean patriotic people like us should forget our land of birth but do ones best to pull it out from the brink. |
Damed
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1 Jan 2009 00:33:43 GMT Report for Abuse
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Though MR Government is not Business friendly....or failures in business circules....banks should have good profits if they run there business well.
Still to see the depth of the Ceylinco issue...but Seylan is loosing ground..as customers drawing their money.
Edited By - Damed - 1 Jan 2009 00:35:42 GMT |
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