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Time for banks to look for alternative financing - Rienzie Wijetilleke

by Shirajiv Sirimane

The level of finances raised from debt is becoming limited and banks have to look for other partners said Chairman/Managing Director Hatton National Bank (HNB) Limited Rienzie Wijetilleke.

He said the time has come to look for alternative ways of financing.

He was speaking at a ceremony held to mark the signing of a strategic alliance for Corporate Finance Services in Sri Lanka through a Memorandum of Understanding (MoU) between HNB and Deutsche Bank AG, Colombo Branch at HNB towers on Wednesday. He said that they have been considering an agreement of this nature for a long time.

"The Bank held on to these plans until the country was on a right economic footing. He said that the future of the economy is in the hands of politicians.

The capital raising requirements of blue-chip Sri Lankan corporates and large-scale infrastructure development projects has grown to exceed the level of funding which can be raised through domestic capital markets.

Chief Country officer Deutsche Bank, Stefan Mahrdt said that competition among banks is high and the demand from the customers too is increasing. "Though both banks compete with each other in some cases co-operation too is important," he said. He said that they are also looking at other opportunities in Sri Lanka.

The strategic alliance will complement and combine the strengths of HNB and Deutsche Bank in the area of Corporate Finance.

The MoU applies to Corporate Finance activities such as Equity and Debt Placement, Issue Management and Underwriting, Loan Syndication, Structured Finance, Mergers and Acquisitions Advisory and Management services, Capital and Financial Restructuring Advisory Services, Management Buy-Out advisory Services, Employee Share Option Scheme advisory services or any other activity that is mutually agreed to constitute Corporate Finance services.

HNB is the largest commercial bank and they account for 13 percent of total deposits from all banks while the HNB accounts for 12.5 percent of total assets from commercial banks.

In 2003, HNB successfully executed Corporate Finance transactions with a total value of over Rs. 11.9 billion. Notable transactions handled by HNB have included Lead/Joint Lead Arranger for Loan Syndications to the Power and Energy sector which have raised over US$ 100 million over the last few years.

Deutsche Bank's Corporate Finance strengths as one of the world's leadinginvestment banks include one of the largest distribution networks in investment banking and the reputation as a ground-breaking and innovative provider of complex and award-winning transactions.

The September 2003, Euromoney Global Financing Poll has ranked Deutsche Bank as No One Overall, International Bonds, International Equity Offerings and number one International Equity-Linked Issues.

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