Muthoot Finance Ltd, India's largest gold financing company, has acquired 29.98 per cent equity stake in Sri Lankan finance services company Asia Asset Finance (AAF) for $2.1 million, according to a stock market disclosure.
The Indian firm acquired over 167.7 million equity shares, representing 29.98 per cent equity holding from Asia Capital Plc, a significant shareholder of AAF, through Colombo Stock Exchange transaction.
The acquisition is part of Muthoot Finance’s plans to help AAF operationalise loan against gold ornaments in Sri Lanka drawing on its own expertise in this field.
“Through this investment, Muthoot Finance expects AAF to improve its lending operations and profitability in coming years and which may improve value of its present investment in AAF,” it said in the statement.
Colombo Stock Exchange-listed AAF is involved in retail finance, hire purchase and business loans through its 11 branches across Sri Lanka.
Muthoot Finance is the flagship company of the Muthoot group, which is also into hospitality, healthcare, media, education, information technology, foreign exchange, insurance distribution and money transfer businesses.
Earlier this month, the company raised over $66 million through the issue of secured redeemable non-convertible debentures and unsecured redeemable non-convertible debentures via a public offering for refinancing debts and some other purposes.
It counts among its shareholders Baring PE India, Matrix Partners and Singapore’s GIC.
(Edited by Joby Puthuparampil Johnson)