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HNB Finance acquires majority stake in Prime Finance

21 Dec 2021

HNB Finance PLC (HNBF) has, via a Colombo Stock Exchange (CSE) disclosure dated yesterday (20), announced that it had entered into a trade to acquire 105.6 million ordinary voting shares of Prime Finance PLC (GSF), which represents a 87.3% stake in the total shareholding of GSF, from Prime Lands (Pvt.) Ltd. by way of a crossing. This trade for an 87.3% stake in GSF was affected by HNBF at a price of Rs. 20.1 per share and the date of settlement for this trade is set for 23 December. Trading of the shares of both companies in the CSE was halted for 10 minutes at 2 p.m. yesterday, pending the announcement of this trade. As a consequence of acquiring an 87.3% stake in GSF, HNBF will, in terms of its obligations under Rule 31 (1) (4) of the Company Take-Overs and Mergers Code 1995 as amended in 2003, make a mandatory offer to the remaining shareholders of GSF. The CSE disclosure further claimed that following the completion of the mandatory offer, it is proposed that HNBF will amalgamate with GSF in terms of Section 239 of the Companies Act No. 7 of 2007, with HNBF being the amalgamated entity. Such a move would be in furtherance of the proposal made by the Central Bank Of Sri Lanka (CBSL) to consolidate non-bank financial institutions (NBFIs). The CBSL had granted its approval for the above described acquisition and has also granted its approval in principle for such an amalgamation of HNBF and GSF.


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