Shareholders approve merger of Sri Lanka's LOLC Finance, Commercial Leasing

The shareholders of Sri Lanka-based LOLC Finance PLC and Commercial Leasing & Finance PLC approved the proposed merger of the two companies March 14.

Under the terms of the merger, LOLC Finance will be the surviving entity, but the consolidation will take place after the completion of Commercial Leasing's acquisition of Sinhaputhra Finance PLC.

The merger was approved by the shareholders of both companies March 11 and the Central Bank of Sri Lanka in December 2021 as part of a broader plan for the consolidation of the financial sector, according to separate regulatory filings.

Sinhaputhra Finance said in a Feb. 11 release it agreed to the merger with Commercial Leasing after the central bank advised that it did not meet the minimum core capital requirement of 2.5 billion Sri Lankan rupees for financial firms.

The deal will see Commercial Leasing issuing up to 54,360,832 new shares to existing shareholders of Sinhaputhra Finance in place of 69,666,580 voting and preference shares they held. Commercial Leasing will be the surviving entity and the merger is expected to be completed March 21.

Meanwhile, the merger of LOLC Finance and Commercial Leasing, which was approved by the central bank and the Colombo Stock Exchange Ltd., will take effect March 31.

As of March 14, US$1 was equivalent to 255.00 Sri Lankan rupees.