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Rescue Mission

May 27, 2009 (LBO) - The Finance Company can be turned around within six months, according to Merchant Bank of Sri Lanka (MBSL) which has been appointed by the banking regulator to manage the troubled finance firm. "The only way to move forward The Finance is engage in day-to-day activities.
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If not, we can't meet the liabilities of depositors.
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"

He said the company has more than 35 billion rupees in assets and had been very profitable except in the last couple of years when a shrinking economy put pressure on its balance sheet as asset values fell.

"The Finance Company has a large asset base, mainly property. With the property market adversely affected by falling prices, the company has a problem."

Ratnayake also said the end of the ethnic war opens up opportunities for business in the north and east. But depositors would be asked not to withdraw deposits for at least a year in order to stabilise the finance company's finances, senior MBSL officials said.

"We're confident we can rehabilitate The Finance in a short period - less than six months," Janaka Ratnayake, chairman of MBSL told a news conference.

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"We'll try to canvass the usual business, namely deposits.

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And we'll start lending again.
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