Debt Reduction

Mar 20, 2010 (LBO) – Sri Lanka's Vallibel Finance will use cash raised from an initial public offering (IPO) to reduce financing costs and expand leasing and hire purchase businesses and its branch network, a senior official said. "We were planning to come to the market in another two to three years but we came early to expand the company," said its chairman Dhammika Perera, who is also the chief of the government investment promotion agency.

"I never expected the company to come this far in such a short time. I have listed 80 percent of the companies on our group and will list the rest in another four to five years."

"Nearly 60 percent of Vallibel Finance depositors are retail investors," Rangamuwa said. "We don't encourage high net worth and institutional deposits too much."

As at end-March 2009 Vallibel Finance had a deposit base of 1.0 billion rupees,

"This company is 35 years old and when we took over five years ago it had 40 million (in deposits)," W D N H Perera, director at Vallibel Finance said.

"When we took over, the previous owners withdrew their money."

As of December 2009 the company's non performing loan ratio was 4.2 percent, while the industry average was 7.0 percent, Pushparajah sa