DFCC sells controlling stake in NAMAL

DIVESTITURE: DFCC Bank sold 5,400,000 shares of its subsidiary, National Asset Management Limited (NAMAL) representing 54% of its issued share capital to Milford Holdings (Pvt) Limited, a subsidiary of Distilleries Company of Sri Lanka Ltd on March 3, 2006.

Milford Holdings (Pvt) Ltd owns 85% of Sri Lanka Insurance Corporation Ltd.

The consideration of approximately Rs. 68 million was determined on the basis of the net asset value of the shares.

DFCC Bank will continue to hold 26% of the issued share capital of NAMAL with the Employees Trust Fund Board holding the remaining 20% of NAMAL.

This transaction will not have a material impact on DFCC's financial results for the year ending March 31, 2006.

DFCC is of the view that this new ownership structure will enable NAMAL to considerably increase the size of funds under its management.