John Keells bankrolled by IFC

Colombo: International Finance Corporation, the World Bank's private sector financing arm, has given a 75 million dollar standby loan for John Keells Holdings (JKH) which can be invested abroad, the firms said in a joint statement. 'This will promote cross border business and growth of infrastructure across the region,' the statement said.

IFC had earlier backed JKH in a container terminal project in Colombo. John Keells is already cash rich following funds raised from a rights issue which have not yet been used but are in high yielding Sri Lanka government treasury bills.
'In the past, as the group has embarked on new, challenging investments, IFC has been a partner of choice due to its global reach,' Susantha Ratnayake, Chairman, John Keells Holdings, said.

'For our regional investments, we require partners with knowledge of the local markets and access to long-term and flexible financing structures. IFC’s support to the group in this context will play an important role.”

IFC said the facility was the largest given to a Sri Lankan firm in manufacturing and services sectors.

'The tailor-made stand-by loan facility is consistent with IFC’s strategy for Sri Lanka, as it will support a domestic entity with operations in key strategic sectors of the economy and address any constraints in securing long-term funding,' IFC said.

'This transaction will also help attract the interests of other overseas financial investors to the country.'

JKH failed in a bid to win a second container terminal concession in the Colombo port but has got a tentative government nod to reclaim land next to the port.

'We have made sure we have funding to make a quick decision,' director Ajith Gunewardene said.
'It comes at competitive terms and rates. We thought it was prudent to sign up now, as credit can be tough in global markets.'

Gunewardene says IFC lent on the strength of the balance sheet of JKH. The credit line came as Standard and Poor's lowered the outlook on Sri Lanka's B+ rating to 'negative'.
The rates were not disclosed but it is a floating rate linked to the London Interbank Offered Rate, officials said.