LOLC Ceylon Holdings Limited

ICRA Lanka confirms the [SL]A(CE) rating assigned to the Guaranteed Redeemable Debentures Programme of LOLC Ceylon Holdings Limited as final

InstrumentRated Amount (LKR Mn)Rating Action
Guaranteed Redeemable Debentures Programme1,000Confirmed the Provisional [SL]A(CE) with Stable outlook as final

Rating action

ICRA Lanka Limited has confirmed the provisional rating of [SL]A(CE) (pronounced SL A Credit Enhancement) rating with Stable outlook to the LKR 1,000 Million Guaranteed Senior Listed Redeemable Rated Debenture Programme of LOLC Ceylon Holdings Limited (LOLC Ceylon or the Company). The letters CE in parenthesis suffixed to a rating symbol stand for Credit Enhancement. A CE rating is specific to the rated issue, its terms, and its structure. The CE ratings do not represent ICRA Lanka’s opinion on the general credit quality of the issuers concerned.

The rating for the Guaranteed Senior Redeemable Debentures is based on the strength of the unconditional and irrevocable guarantee from LOLC Holdings PLC (LOLC) (rated SL A with Stable outlook by ICRA Lanka) covering the principal and two interest instalments (annual) of the issue. The guarantor undertakes the obligation to pay, on demand from the Trustee, LKR 1,000 Million, being the total principal sum, and two-yearly interest instalments of the Guaranteed Senior Listed Redeemable Debentures. The rating also assumes that the guarantee will be duly invoked by the Trustee, as per the terms of the underlying trust deed and the guarantee agreement, in case there is a default in payment by LOLC Ceylon (Issuer).

About the Company:

LOLC Ceylon Holdings Limited (LOLC Ceylon) is a fully-owned subsidiary of LOLC Holdings PLC (LOLC). Upon listing, the shares owned by LOLC in its Non-Banking Financial Institutions (NBFIs) namely; LOLC Finance PLC (44.79%), Commercial Leasing and Finance PLC (98.92%) and LOLC Development Finance PLC (55.55%) will be transferred to LOLC Ceylon.

Guarantor Profile:

LOLC Holdings PLC

Setup in 1980, LOLC Holdings PLC has evolved itself from a financial services provider to a holding company which also has interests in manufacturing, trading, plantations, leisure and energy. The group has diversified geographically into Cambodia, Myanmar, Indonesia, Pakistan, Maldives and in the African region. On April 13, 2020, LOLC Group has divested 70% of its stake in PRASAC for a total consideration of about USD 603 Mn. The investment was held by LOLC International Private Limited (LOLCIPL), a fully owned subsidiary of LOLC holdings, incorporated in Singapore.

During FY2021, LOLC group reported a consolidated PAT of LKR 53.2 Bn on a total asset base of LKR 870 Bn, as compared to the PAT of LKR 19.8 Bn on a total asset base of LKR 1,336 Bn. For the 3M ended June 30, 2021, the group reported a PAT of 4.1 Bn on a total asset base of LKR 926 Bn. The consolidated asset base has moderated following the PRASAC divestment.

Key financial indicators of LOLC Holdings PLC
In LKR MnFY2019FY2020FY20213MFY2022*
Net Interest Income[1]53,90462,17440,34910,926
Profit after [2]Tax19,63619,79253,1974,134
Networth (adjusted)132,418154,996209,103160,057
Loans and Advances706,789897,447412,838417,522
Total Assets1,043,9151,335,919869,541925,887
Return on Equity24.47%21.68%46.55%11.95%
Return on Assets2.10%1.66%4.82%1.84%
Gearing (times)6.336.892.723.83
*Unaudited Financials    
Rating history for the last three years:
Sachini Costa

Rasanga Weliwwatte

[1] Including discontinued operations

[2] PAT for 9MFY2021 includes the capital gain of LKR 42.9Bn from the disposal of PRASAC Microfinance Institution Limited


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