LOLC Ceylon Holdings Limited

ICRA Lanka reaffirms [SL]A(CE) rating with Stable outlook for the Guaranteed Redeemable Debentures Programme of LOLC Ceylon Holdings Limited

Instrument Rated Amount (LKR Mn)Rating Action
Guaranteed Redeemable Debentures Programme1,000[SL]A(CE) with Stable outlook; reaffirmed

Rating action

ICRA Lanka Limited has reaffirmed the issue rating of [SL]A(CE) (pronounced SL A Credit Enhancement) with Stable outlook for the LKR 1,000 Mn Guaranteed Senior Listed Redeemable Rated Debenture Programme of LOLC Ceylon Holdings Limited (“LOLC Ceylon”/ “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 Mn, 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 Asia Holdings. Upon listing, the shares owned by LOLC Holdings PLC in its Sri Lankan Non-Banking Financial Institutions (NBFIs) were transferred to LOLC Ceylon. Subsequent to the merger of Commercial Leasing and Finance PLC (CLC) and LOLC Finance PLC (LOFC), LOLC Ceylon now holds 81.30% of LOFC and 55.55% of LOLC Development Finance PLC.

Rating history:

Guarantor Profile:

LOLC Holdings PLC

Setup in 1980, with ORIX Corporation of Japan and the International Finance Corporation (IFC) among the initial shareholders, today LOLC Holdings PLC has evolved itself from a financial services provider to a holding company which also has interests in manufacturing, trading, plantations, leisure construction and energy. The group has diversified geographically into Cambodia, Myanmar, Indonesia, Pakistan, Philippines Tajikistan, Zambia, Nigeria, Malawi, Tanzania, Egypt Zimbabwe and Kenya.

On April 10, 2020, LOLC Group has divested 70% of its stake in PRASAC for a total consideration of about USD 603 Mn and the balance stake was divested in June 2021 for USD 225 Mn. The investment was held by LOLC International Private Limited (LOLCIPL), a fully owned subsidiary of LOLC holdings, incorporated in Singapore. Furthermore, on March 31, 2022, 2 of the key local operating NBFIs; LOLC Finance PLC (“LOFC”) and Commercial Leasing & Finance PLC (“CLC”) was amalgamated, where LOFC continued to be the surviving entity.

For FY2022, the LOLC group reported a consolidated PAT of LKR 77.78 Bn on a total asset base of LKR 1,354.16 Bn as compared to a PAT of LKR 53.19 Bn on a total asset base of LKR 874.94 Bn during the previous financial year.

Key financial indicators of LOLC Holdings PLC (Consolidated)
Analysts
Sachini Costa
+94-774781595
sachini.costa@icralanka.com

Rasanga Waliwatte
+94-773553564
rasanga@icralanka.com

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