Associate Motor Finance Company PLC (AMF) has acquired 93.809 percent of Arpico Finance Company PLC shares, following the expiration of the mandatory offer on November 19.
AMF acquired 40.59 percent stake in Arpico Finance on October 1 from the largest shareholder Alfinco Insurance Brokers (Pvt) Ltd at Rs. 166 per share in a Rs. 501 million deal, which increased its ownership to 41.33 percent.On October 2, the remaining two major shareholders Alliance Finance Co. PLC and Dawi Investment Trust (Pvt) Ltd sold their 19.53 percent and 10.10 percent stakes respectively to AMF.
The offer document was circulated to the shareholders on October 24, at which point AMF held approximately 71.16 percent of Arpico Finance.
22.58 percent of the shares were acquired by AMF during the offer period through both complete and yet to be completed transactions while another 0.069 percent of shares were acquired on Colombo Stock Exchange trading floor.The acquisition is to better accommodate the Central Bank’s Financial Sector Consolidation Plan, according to which non-banking financial institutions are required to have a minimum of Rs. 8 billion in assets and Rs. 1 billion in core capital by January 1, 2016 which is to be increased to Rs. 1.5 billion by January 1, 2018.
According to the financial statements of the companies for the quarter that ended this September, AMF held assets worth Rs. 3.38 billion, and Arpico Finance had assets worth Rs. 5.18 billion while net assets per share were Rs. 150 and Rs. 99.53 respectively.AMF had Rs. 840.47 million in core capital while Arpico Finance’s was Rs. 740.28 million, thereby the merged company will adhere to the guidelines stipulated by the consolidation plan.
Arpico Finance for the quarter posted Rs. 127.12 million in net interest income, a 22 percent increase year-on-year(yoy) while the net profit was Rs. 28.49 million, just a 3 percent increase yoy. AMF meanwhile recorded a net interest income of Rs. 100.31 which was a 3 percent increase yoy and a net profit of Rs. 23.61, a decline of 37 percent. Arpico Finance, the 2nd oldest finance company in the country was established in 1951 by Richard Pieris. It is the 5th oldest finance company in Sri Lanka.