MICROCAPITAL BRIEF: Lanka Orix Leasing Company (LOLC) of Sri Lanka Pays $20m to Acquire 60% Stake in Thaneakea Phum (Cambodia) from Developing World Markets, TPC Employee Association

Thaneakea Phum (Cambodia) (TPC), a Cambodia-based microfinance institution (MFI), recently informed MicroCapital that Developing World Markets Asset Management (DWM), a US-based investment fund manager, has sold 55-percent equity stake in TPC to LOLC Micro Investments Limited (LOMI), a subsidiary of Sri-Lankan financial services group Lanka Orix Leasing Company (LOLC) [1]. Additionally, the TPC employee association has sold a 4.5-percent stake to LOMI thereby giving LOMI a “controlling” share of 60 percent. LOMI has acquired this majority stake for a total of USD 20.3 million. Following the deal, DWM retains 37-percent stake in TPC.

As of July 30, 2014, TPC reported total assets of USD 110 million, a gross loan portfolio of USD 95.6 million outstanding to approximately 165,000 active borrowers, return on assets (ROA) of 6.78 percent and return on equity (ROE) of 37.18 percent. TPC does not accept deposits.

By Nisha Koul, Research Associate

About Thaneakea Phum (Cambodia) (TPC): Thaneakea Phum (Cambodia) Limited was launched in 1994 in Cambodia as part of the Small Enterprise Development program of US-based nonprofit Catholic Relief Services. In 2002, the initiative was incorporated as a limited liability company and given the name Thaneakea Phum Limited. In 2003, Thaneakea Phum received its license from the National Bank of Cambodia to operate as an official microfinance institution. As of July 30, 2014, TPC reported total assets of USD 110 million, a gross loan portfolio of USD 95.6 million outstanding to approximately 165,000 active borrowers, return on assets (ROA) of 6.78 percent and return on equity (ROE) of 37.18 percent. TPC does not accept deposits.

About Lanka Orix Leasing Company: Incorporated in March 1980, Lanka Orix Leasing Company (LOLC) is a public listed company that provides leasing finance to entrepreneurs and commercial institutions for the acquisition of machinery and equipment. LOLC is based in Rajagiriya, Sri Lanka. In 2009, LOLC established a microfinance subsidiary, Lanka Orix Microcredit Company (LOMC), in partnership with Dutch development bank Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden (FMO). As of September 2014, LOLC has a controlling share of 60-percent in Thaneakea Phum (Cambodia) (TPC), a microfinance institution in Cambodia, through its microfinance operations subsidiary LOLC Micro Investments Limited (LOMI). As of March 2014, LOLC reported USD 1.3 billion in total assets. LOLC is a member of the Japanese conglomerate Orix.

About Developing World Markets Asset Management (DWM): Developing World Markets (DWM) is a US-based asset manager and investment bank that aims to make investments to promote sustainable economic development. It provides both debt and equity investments to microfinance institutions (MFIs) and other socially motivated organizations. As of June 30, 2014, DWM manages approximately USD 450 million in assets and has financed approximately 140 financial institutions in 40 countries.

Sources and Additional Resources:

[1] Information provided by Thaneakea Phum (Cambodia) (TPC) to MicroCapital, September, 2014

MicroCapital Story, April 2014, Grameen Credit Agricole Microfinance Foundation (GCAMF) Lends $4m to Arvand of Tajikistan, Bina Artha Ventura of Indonesia, Thaneakea Phum of Cambodia

MicroCapital Story, October 2013, PlaNet Finance Partners with Thaneakea Phum Cambodia (TPC), China Foundation of Poverty Alleviation (CFPA) to Implement Microfinance Risk Management System

MicroCapital Story, July 2013, BRAC, LOLC Micro Investments Buy 90% of Shares of Sri Lanka’s Nanda Investments and Finance, Plan its Downscaling to Microfinance

MicroCapital Universe Profile, Thaneakea Phum (Cambodia) (TPC)

MicroCapital Universe Profile, Developing World Markets Asset Management (DWM)

MicroCapital Universe Profile, Lanka Orix Leasing Company

MicroCapital Universe Profile, LOLC Micro Credit Limited (LOMC)

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