Muscat: Major Omani and UAE banks along with Asian Development Bank (ADB) funded a $69 million facility through a syndicate loan for LOLC Finance, one of the biggest and rapidly growing non-banking financial institutions in Sri Lanka. Alpen Capital, Dubai acted as the financial advisor to LOLC Finance.
The syndication was structured to house two tranches — tranche A, which is for a period of seven years, has been funded completely by the Asian Development Bank. Tranche B, which is for a period of three years, has been funded by Bank Muscat, First Gulf Bank, Emirates NBD, National Bank of Oman and Rakbank.
ADB acted as the lender of record for both the tranches and Bank Muscat and First Gulf Bank acted as the mandated lead arrangers for Tranche B.
A signing ceremony took place on January 13 in Dubai and was attended by the management team of LOLC Finance, Alpen Capital, ADB as well as the representatives from the UAE and Omani banks involved in the transaction.
LOLC Finance, the flagship finance company of LOLC Group, is the second largest non-banking financial institution by asset size with 140 outlets and services which include Islamic financial products. The principal activities of LOLC Finance comprise leasing, loans, micro finance, hire purchase, margin trading, mobilisation of public deposits and Islamic financing. The company is rated A (Stable) by ICRA, a Moody’s associate.
“I would like to extend our gratitude to all parties involved in the transaction. We have worked closely with ADB in uplifting the entrepreneurs in Sri Lanka, and this transaction is even more special as it is the first time a consortium of Middle Eastern banks join us in our developmental role,” said Ishara Nanayakkara, deputy chairman, LOLC Group, Sri Lanka.
“We are proud to be associated with this transaction and are happy to support LOLC Finance in their business growth. This transaction is unique since it marks Alpen Capital’s first syndication with the Asian Development Bank and also the closure of our first ever transaction for a Sri Lankan financial institution,” MahboobMurshed, managing director, Alpen Capital.
“We are currently witnessing an increased appetite from regional banks to lend to financial institutions and corporates in emerging markets as a part of their diversification strategy. We are confident that the experience gained from this transaction will help us make further in-roads on such cross border transactions,” he added.
Alpen Capital is a regional boutique investment banking advisory firm which provides advisory solutions in the areas of merger and acquisitions, debt, equity and capital markets. It has offices in the UAE, Qatar, Oman, Saudi Arabia, Bahrain and India. Alpen Capital has executed several complex transactions and worked for some of the largest business conglomerates in the Gulf Cooperation Council (GCC) and India.
Alpen Capital also provides in-depth research on GCC sectors covering growth trends, challenges and opportunities.