WASHINGTON, D.C., January 26, 1999 --- The International Finance Corporation has signed an agreement to assist a Sri Lankan leasing company, Mercantile Leasing Limited (MLL), to raise funds for expansion.
Under a joint IFC-National Development Bank guarantee, MLL will raise Rs. 220 million (US$3.2 million equivalent) by issuing 5 year debentures to local investors. These debentures will be listed on the Colombo Stock Exchange. In addition, IFC will extend a loan of $1.8 million to enable MLL to extend US-dollar denominated leases to exporters based in Sri Lanka.
IFC's investment is part of a restructuring program being implemented by MLL to strengthen its operations and its capital base. This restructuring has already led to a doubling of business volume and MLL is poised to become a strong player in Sri Lanka's leasing industry.
Mr. Rashad Kaldany, Director of IFC's South and Southeast Asia Department noted the contribution of MLL to financing small and medium enterprises and said that IFC's loan will directly assist more than 100 small businesses in Sri Lanka's dynamic export sector. He also underlined the contribution of the IFC guarantee facility in developing the corporate debt securities market.
IFC, which has been investing in Sri Lanka since the early 1970s, pioneered leasing in the country in 1980. IFC recently opened an office in Colombo in recognition of the potential for further investment in the country.
IFC, part of the World Bank Group, fosters growth in the developing world and in emerging economies by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
