Group Lease invests in Sri Lankan finance firm
BANGKOK: Thai motorcycle lessor Group Lease PCL has acquired a 30% stake in Sri Lanka’s Commercial Credit and Finance PLC (CCF) for US$70 million (RM289 million), the company said yesterday, in its first major expansion outside Southeast Asia.
The acquisition comes a month after it bought a 71.9% stake in BG Microfinance Myanmar from the Sri Lanka finance firm to expand into Myanmar, adding to existing operations in Southeast Asian countries in Cambodia, Laos and Indonesia.
Group Lease, part of Japan’s Wedge Holdings Co, has the right to buy the remaining 70% in CCF if existing shareholders want to sell the stake, chairman and chief executive Mitsuji Konoshita told a joint news conference.
Group Lease plans to combine its digital finance platform, including electronic payment and insurance, with CCF’s microfinance model to grow business, Konoshita said, adding it expects to begin booking profit from the purchase in the fourth quarter and CCF is expected to generate profit of US$7 million a year.
CCF has assets of US$500 million, of which one-fifth is in the microfinance business, and expects a net profit of US$22 million this year, CCF chief executive Roshan S. Egodage said.
The Thai firm, which is looking to buy more assets, is also buying an additional 28.1% in BG Microfinance from CCF to gain complete control in the Mynamar firm, he said.
Thai operations contributed about 40% of Group Lease’s profit, while the rest came from foreign operations, mostly from Cambodia, Konoshita said.
With assets of US$450 million, Group Lease is one of Thailand’s biggest three motorcycle lessors with a market share of 10% to 11%. It is the market leader in Cambodia and Laos with shares of 95% and 40%, respectively.
Group Lease shares surged as much as 6.4% to 37.25 baht (RM4.44), outperforming a 0.5% gain in the main Thai market. – Reuters