January, 7, 2020
Sri Lanka’s LOLC Holdings yesterday (6) stated that it has entered into two agreements with Kookmin Bank, to sell its Cambodian sub-subsidiary for 603 million US dollars.
In a stock market disclosure the company noted that its subsidiary LOLC International Ltd. of Singapore on 6 January along with other minority shareholders of PRASAC Microfinance Institution Ltd. of Cambodia entered into a Share Purchase Agreement and a Shareholders Agreement with Kookmin Bank, the largest commercial bank in South Korea for the sale of PRASAC’s entire shareholding.
This is subject to receiving final approval from the National Bank of Cambodia (NBC) and the Financial Services Commission of the Republic of Korea. PRASAC is the largest microfinance institution in Cambodia, the company added.
LOLC International which holds 70% stake in PRASAC will receive $ 603 million for the sale of its stake in two tranches. Proceeds of $ 422 million will be received upon receipt of approval from NBC and the balance $ 181 million in 2022.
PRASAC was LOLC’s first foreign investment in 2007. The group also operates microfinance firms in Myanmmar, Philippines, Indonesia, Pakistan, Zambia and Nigeria including LOLC Cambodia PLC, the fourth largest microfinance company in Cambodia.
Following the publication of Bloomberg article, in a filing to the CSE on 12 December, LOLC said upon certain parties indicating their interest in acquiring a stake in PRASAC Microfinance, Cambodia, LOLC has been in the process of exploring possibilities of a sale of whole or part of its holding. In any event, the sale will require prior approval of National Bank of Cambodia.
Over 80% shareholding of LOLC Holdings PLC is controlled by Deputy Chairman Ishara Nanayakkara and other related parties.
LOLC’s share price had risen 179 rupees by December 30, from 113 rupees a share before the deal was announced in early-December. However yesterday the company saw its share price dip by Rs. 1.30 to close at Rs. 169.