Sri Lanka Maldives investment banking partners work on US55mn in deals

Friday, September 3rd, 2010

Millennium Capital Management (MCM) Holdings of Maldives and Sri Lanka’s Acuity is partnering to provide investment banking services in Maldives with deals worth 55 million US dollars in the pipeline, officials said.

Acuity, a unit of Sri Lanka’s listed DFCC Bank and Hatton National Bank is working with MCM Holdings initially to finance hotel sector firms in the tourist paradise, Acuity chief Ray Abeywardena said.

But he said there was potential in healthcare and education.

MCM Holdings chairman Mohamed Jaleel, a former state minister for finance and a governor of the Maldives Monetary Authority said a fully fledged investment banking service provider was needed by businesses in the archipelago for years.

“Maldives’ economy is driven by the tourism,” Jaleel said. “One of the first projects we will enter will be in tourism. We will find other potential areas in due course.”

Shehan Cooray, who heads of Acuity’s corporate finance division, said the partnership was working on a 15 million US dollar debt syndication for an undisclosed leisure firm and about 40 million dollars worth other deals were being looked at.

Ahmed Adeeb, chief operating officer of MCM, the finance arm of MCM Holdings said there was renewed interest in hotel investment after the Maldivian government changed the terms of island leases.

State owned uninhabited islands were earlier leased for 25 years with large projects going up to 35 years. But a new law passed in the parliament which is due to be ratified by the president shortly had extended the lease period up to 50 years.

“Companies that sells 55 percent of the stock to the public may be able to get leases up to 90 years, though the details are still not clear,” he said.

Officials say there is potential for growth in the fledgling Maldivian capital market where so far only a handful of companies are listed and trading is not active.

As Maldives has freed its capital market its people were investing abroad including in the Colombo stock market.

Jaleel said a formal link with Acuity will also help Maldivians invest in Colombo more easily.

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