Union Bank Plans a Country Fund through NAMAL. Possibility of Listing is Singapore Explored

13th February 2011, www.sundaytimes.lk

Union Bank Ltd (UBL), which scored a double whammy this week by announcing its intention to go public by March end while acquiring a majority stake in Distilleries Company subsidiary, National Asset Management Ltd (NAMAL) is planning a country fund, UBL officials said.

“We will be creating a country fund for Sri Lanka and other emerging markets through NAMAL,” Alex Lovell, Deputy Chairman UBL and a high networth investor told the Business Times on the sidelines of UBL’s Initial Public Offering launch.

He added that NAMAL will shortly apply for regulatory sanctions pertaining to this fund. He said that the fund is still being structured and that they might explore twin listings here and abroad.

“We are exploring the possibility of listing this fund in a stable, highly regulated and a safe place such as Singapore,” he said. Distilleries subsidiary, Milford Holdings Pvt Ltd is selling a 70 % majority stake in pioneering unit trust firm, NAMAL for nearly Rs 455 million to two parties - UBL and Ennid Capital, the company in a statement said on Thursday.

It said a share sale agreement for UBL to purchase 51%, while Ennid Capital Pvt Ltd will buy 19% in NAMAL. Ennid Capital is Sri Lankan Jeweller, B.P. de Silva’s investment arm.

UBL IPO is slated to raise Rs. 375 million. The bank is offering 15 million shares at Rs. 25 in three categories of 1.5 million for employees, 2.25 million for customers that have maintained accounts for a minimum of 6 months as at 31 January 2011 and 11.25 million shares for investors.

Through this IPO UBL plans to carry out branch expansion and mobilisation of low cost funds, expand while leveraging of e-channels, focus on priority sectors in the economy for credit, and carry out trade financing, expand their capital market operationsand share trading, introduce banking for the bottom of the pyramid (bare-foot banking), implementation of a core banking system to increase efficiency and resource utilization and risk management system for prudent credit pricing and monitoring and focused recoveries.

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