ALLIANCE FINANCE COMPANY PLC
PROSPECTUS
AN ISSUE OF UPTO TEN MILLION (10,000,000) LISTED, RATED, GUARANTEED, SENIOR, REDEEMABLE GREEN BONDS AT THE PAR VALUE OF SRI LANKA RUPEES ONE HUNDRED (LKR 100/-) EACH TO RAISE SRI LANKA RUPEES ONE BILLION (LKR 1,000,000,000/-)
MAXIMUM ISSUE WILL NOT EXCEED TEN MILLION (10,000,000) OF
SAID GREEN BONDS OF A VALUE OF NOT EXCEEDING SRI LANKA RUPEES ONE BILLION
(LKR 1,000,000,000/-)
TO BE LISTED ON THE
COLOMBO STOCK EXCHANGE
Rated A- by Lanka Rating Agency Limited
ISSUE OPENS ON
17TH FEBRUARY 2025
Managers and Placement Agents to the Issue | Corporate Treasury |
Alliance Finance Company PLC - Green Bond Issue 2025 | i
This Prospectus is dated 06th February 2025
The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of information in this Prospectus. However, CSE assumes no responsibility for accuracy of the statements made, opinions expressed, omitted statements or reports included in this Prospectus. Moreover, the CSE does not regulate the pricing of Green Bonds which is decided solely by the Issuer.
The delivery of this Prospectus shall not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of the Company since the date of this Prospectus. If any material change in the affairs of the Company occurs subsequent to the Prospectus date and before the Issue opening, same will be notified by way of a market disclosure/an addendum.
We advise you to read the content of the Prospectus carefully prior to investment.
If you are in a doubt regarding the contents of this document or of you require any clarification or advice in this regard, you should consult the Manager to the Issue, your stockbroker, lawyer or any other professional advisor.
Alliance Finance Company PLC - Green Bond Issue 2025 |ii
Responsibility for the Content of the Prospectus
This Prospectus has been prepared with available information.
The Directors of Alliance Finance Company PLC (the Company or the Issuer) have seen and approved this Prospectus and collectively and individually, accept full responsibility for the accuracy of the information given and confirm that after making all reasonable inquiries and to the best of their knowledge and belief, the information contained herein is true and correct in all material respects and that there are no other material facts, the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of the Company have been given in this Prospectus, such representations have been made after due and careful enquiry of the information available to the Company and making assumptions that are considered to be reasonable at the present point in time in its best judgment.
The Company accepts responsibility for the information contained in this Prospectus. While the Company has taken reasonable care to ensure full and fair disclosure of pertinent information, it does not assume responsibility for any investment decisions made by the investors based on the information contained herein. In making such investment decisions, prospective investors are advised to read the Prospectus and rely on their own examination and assessment of the Company and the terms of the Green Bonds issued including the risks associated.
Registration of the Prospectus
A copy of the Prospectus has been delivered to the Registrar of Companies for registration in compliance with the provisions of Section 40 of the Companies Act No.7 of 2007. The following are the documents attached to the copy of the Prospectus delivered to the Registrar of Companies for registration pursuant to Section 40(1) of the Companies Act.
- The written consent of the Auditors and Reporting Accountants for the inclusion of their name in the Prospectus as Auditors and Reporting Accountants to the Issue and to the Company.
- The written consent of the Rating Agency for the inclusion of their name in the Prospectus as Rating Agency to the Issue and to the Company.
- The written consent of the Trustee to the Issue for the inclusion of their name in the Prospectus as Trustee to the Issue.
- The written consent of the Bankers to the Issue for the inclusion of their name in the Prospectus as Bankers to the Issue.
- The written consent of the Company Secretary of the Company for the inclusion of the name in the Prospectus as Company Secretary to the Company.
- The written consent of the Registrars to the Issue for the inclusion of their name in the Prospectus as Registrars to the Issue.
- The written consent of the Lawyers to the Issue for the inclusion of their name in the Prospectus as Lawyers to the Issue.
- The written consent of the Independent External Verifier to the Issue for the inclusion of their name in the Prospectus as Independent External Verifier to the Issue
- The written consent of the Managers and Placement Agents to the Issue for the inclusion of their names in the Prospectus as Managers and Placement Agents to the Issue.
- The written consent of the Guarantor to the Issue for the inclusion of their name in the Prospectus as Guarantor to the Issue.
- The declaration made and subscribed to, by each of the Directors of the Company herein named as a Director, jointly and severally confirming that each of them have read the provisions of the Companies Act and the CSE Listing Rules relating to the Issue of the Prospectus and that those provisions have been complied with.
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The said Auditors and Reporting Accountants to the Issue and to the Company, Trustee to the Issue, Bankers to the Issue, Company Secretary, Managers and Placement Agents to the Issue, Guarantor to the Issue, Registrars to the Issue, Lawyers to the Issue, Independent External Verifier to the Issue, Rating Agency have not, before the delivery of a copy of the Prospectus for registration with the Registrar of Companies in Sri Lanka withdrawn such consent.
Registration of the Prospectus in Jurisdictions Outside of Sri Lanka
This Prospectus has not been registered with any authority outside of Sri Lanka. Non-Resident investors may be affected by the laws of the jurisdiction of their residence. Such investors are responsible to comply with the laws relevant to the country of residence and the laws of Sri Lanka, when making the investment.
Representation
The Green Bonds are issued solely on the basis of the information contained and representations made in this Prospectus. No dealer, salesperson, individual or any other outside party has been authorized to give any information or to make any representation in this connection with the Issue other than the information and representations contained in this Prospectus and if given or made such information or representations must not be relied upon as having been authorized by the Company.
Forward Looking Statements
Any Statements included in this Prospectus that are not statements of historical fact constitute "Forward Looking Statements". These can be identified by the use of forward looking terms such as "expect", "anticipate", "intend", "may", "plan to", "believe", "could" and similar terms or variations of such terms. However, these words are not the exclusive means of identifying Forward Looking Statements. As such, all or any statements pertaining to expected financial position, business strategy, plans and prospects of the Company are classified as Forward Looking Statements.
Such Forward Looking Statements involve known and unknown risks, uncertainties and other factors including but not limited to regulatory changes in the sectors in which the Company operates and its ability to respond to them, the Company's ability to successfully adapt to technological changes, exposure to market risks, general economic and fiscal policies of Sri Lanka, inflationary pressures, interest rate volatilities, the performance of financial markets both globally and locally, changes in domestic and foreign laws, regulation of taxes and changes in competition in the industry and further uncertainties that may or may not be in the control of the Company.
Such factors may cause actual results, performance and achievements to materially differ from any future results, performance or achievements expressed or implied by Forward Looking Statements herein. Forward Looking Statements are also based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future.
Given the risk and uncertainties that may cause the Company's actual future results, performance or achievements to materially differ from that expected, expressed or implied by Forward Looking statements in this Prospectus, investors are advised not to place sole reliance on such statements.
Alliance Finance Company PLC - Green Bond Issue 2025 |iv
Presentation of Currency Information and Other Numerical Data
The financial statements of the Company and currency values of economic data or industry data in a local context will be expressed in Sri Lanka Rupees. References in the Prospectus to "LKR", "Rupees" or "Rs." is the lawful currency of Sri Lanka. Certain numerical figures in the Prospectus have been subject to rounding adjustments, accordingly numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. All numerical figures given under Section 7.0 of the Prospectus are audited figures unless otherwise stated.
IMPORTANT
All Applicants should indicate in the Application for Green Bonds, their Central Depository Systems (Private) Limited (CDS) account number.
In the event the name, address or NIC number/passport number/company number of the Applicant mentioned in the Application Form differs from the name, address or NIC number/passport number/company number as per the CDS records, the name, address or NIC number/ passport number/company number as per the CDS records will prevail and be considered as the name, address or NIC number/passport number/company number of such Applicant. Therefore, Applicant are advised to ensure that the name, address or NIC number/passport number/company number mentioned in the Application Form tally with the name, address or NIC number/passport number/company number given in the CDS account as mentioned in the Application Form.
As per the directive of the Securities and Exchange Commission made under Circular No.08/2010 dated 22nd November 2010 and Circular No.13/2010 issued by the CDS dated 30th November 2010, all Green Bonds are required to be directly deposited into the CDS. To facilitate compliance with this directive, all Applicant are required to indicate their CDS account number.
In line with this directive, THE GREEN BONDS ALLOTTED TO AN APPLICANT WILL BE DIRECTLY DEPOSITED IN THE CDS ACCOUNT OF SUCH APPLICANT, the details of which is indicated in their Application Form. If the CDS account number indicated in the Application Form is found to be inaccurate /incorrect or there is no CDS number indicated, the Application will be rejected, and no allotments will be made. The Company may require an Applicant to provide such documentation as is reasonably necessary to satisfy itself that the investor is an Applicant.
PLEASE NOTE THAT GREEN BOND CERTIFICATES WILL NOT BE ISSUED, HOWEVER, PLEASE NOTE THAT UPON THE ALLOTMENT OF GREEN BONDS UNDER THIS ISSUE, THE ALLOTTED GREEN BONDS WOULD BE CREDITED TO THE APPLICANT'S CDS ACCOUNT INDICATED IN THE APPLICATION FORM.
Applicant who wishes to open a CDS account, may do so through a Trading Participants of the CSE as set out in Annexure IV or through any Custodian Bank as set out in Annexure V of this Prospectus.
Alliance Finance Company PLC - Green Bond Issue 2025 | v
ISSUE AT A GLANCE
Issuer | Alliance Finance Company PLC | ||||||||||||||||
Instrument | Listed, Rated, Guaranteed, Senior, Redeemable Green Bonds | ||||||||||||||||
Listing | The Green Bonds will be listed on the Colombo Stock Exchange | ||||||||||||||||
Number of Green Bonds | An Issue of upto Ten Million (10,000,000) Listed, Rated, Guaranteed, Senior, | ||||||||||||||||
to be Issued | Redeemable Green Bonds | ||||||||||||||||
Amount to be Raised | A sum of up to Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) | ||||||||||||||||
Entity Rating | BBB- by Lanka Rating Agency Limited | ||||||||||||||||
Issue Rating | A- by Lanka Rating Agency Limited | ||||||||||||||||
Guarantor | Seylan Bank PLC- Rated A+ (lka) with a Stable Outlook by Fitch Ratings Lanka | ||||||||||||||||
Limited, January 2025 | |||||||||||||||||
Issue Price | Rupees One Hundred (LKR 100/-) per each Green Bond | ||||||||||||||||
Par Value | Rupees One Hundred (LKR 100/-) per each Green Bond | ||||||||||||||||
Guaranteed Green Bonds | Pursuant to the Letter of Guarantee, an amount of a maximum of Rupees One | ||||||||||||||||
Billion (LKR 1,000,000,000) on the maximum of Ten Million (10,000,000) Listed, | |||||||||||||||||
Rated, Guaranteed, Senior, Redeemable Green Bonds to be issued by the | |||||||||||||||||
Company at an Issue Price of LKR 100/- each on account of the principal and for | |||||||||||||||||
up to two interest payments amounting to Rupees One Billion One Hundred | |||||||||||||||||
Seven Million Five Hundred Thousand (LKR 1,107,500,000/-) have been | |||||||||||||||||
guaranteed by Seylan Bank PLC. | |||||||||||||||||
Details of Green Bonds | |||||||||||||||||
Listed, Rated, | |||||||||||||||||
Guaranteed, | Interest | Annual | Interest | ||||||||||||||
Senior, | Effective | ||||||||||||||||
Tenure | Rate | Payment | |||||||||||||||
Redeemable | Rate | ||||||||||||||||
(per annum) | Frequency | ||||||||||||||||
Green Bonds Type | (AER) | ||||||||||||||||
of Interest | |||||||||||||||||
Fixed Rate | 3 years | 10.75% p.a. | 11.03% | Semi-annually | |||||||||||||
Minimum Number of | The minimum subscription requirement applicable for an investor applying for | ||||||||||||||||
Green Bonds | Green Bonds shall be Rupees Ten Thousand (LKR 10,000/-). | ||||||||||||||||
to be Subscribed | |||||||||||||||||
Any Application in excess of the minimum subscription requirement shall be in | |||||||||||||||||
multiples of Rupees Ten Thousand (LKR 10,000/-). | |||||||||||||||||
Interest Payment Date(s) | The dates on which payments of interest in respect of the Green Bonds shall fall | ||||||||||||||||
due, which shall be six (06) months from the Date of Allotment and every six (06) | |||||||||||||||||
months therefrom from the Date of Allotment until the Date of Redemption and | |||||||||||||||||
includes the Date of Redemption. | |||||||||||||||||
Alliance Finance Company PLC - Green Bond Issue 2025 |vi
Interest Period | The six (06) month period from an Interest Payment Date and ending on the date | ||
immediately preceding the next Interest Payment Date (inclusive of the | |||
aforementioned commencement date and end date) and shall include the period | |||
commencing from the Date of Allotment and ending on the date immediately | |||
preceding the first Interest Payment Date (inclusive of the aforementioned | |||
commencement date and end date) and the period from the last Interest | |||
Payment Date before the Date of Redemption and ending on the date | |||
immediately preceding the Date of Redemption (inclusive of the aforementioned | |||
commencement date and end date). | |||
Mode of Payment of | Through an electronic fund transfer mechanism recognized by the banking | ||
Principal Sum and | system of Sri Lanka such as SLIPS and RTGS where accurate bank account details | ||
Interest | are provided by the Green Bond Holders subject to the prevalent limitation with | ||
regard to SLIPS and RTGS or by cheque marked "Account Payee Only". | |||
Issue Opening Date | 17th February 2025 | ||
Date of Redemption/ | The date on which Redemption of the Green Bonds will take place as referred to | ||
Maturity Date | in Section 5.6 of this Prospectus. | ||
Date of Allotment | The date on which the Green Bonds will be allotted by the Company to Applicants | ||
subscribing thereto. | |||
Closure Date of the | Subject to the provisions contained below, the subscription list for the Green | ||
Subscription List | Bonds will open at 9.30 a.m. on 17th February 2025 and will remain open for | ||
fourteen (14) Market Days including the Issue Opening Date until closure at 4.30 | |||
p.m. on 7th March 2025. | |||
However, the subscription list will be closed on an earlier date at 4.30 p.m. with | |||
notification to the CSE on the maximum of Ten Million (10,000,000) Green Bonds | |||
being fully subscribed | |||
In the event the Board of Directors of the Company decides to close the Green | |||
Bond Issue without the full subscription of the initial Ten Million (10,000,000) | |||
Green Bonds, such decision is to be notified to the CSE on the day such decision | |||
is made and the subscription list will be closed on the following Market Day at | |||
4.30 pm (refer Section 5.2 of this Prospectus). | |||
Basis of Allotment | In the event of an over subscription, the Board of Directors of the Company will | ||
endeavour to decide the basis of allotment of the Green Bonds in a fair manner | |||
within seven (07) Market days from the closure of the Issue. | |||
The Board however shall reserve the right to allocate up to a maximum of 75% | |||
of the Number of Green Bonds to be allotted under this Prospectus on a | |||
preferential basis, to identified institutional investor/s of strategic importance | |||
with whom the Company might have mutually beneficial relationships in the | |||
future as future investors. | |||
Number of Green Bonds to be allotted to identified institutional investor/s of | |||
strategic and operational importance, on a preferential basis or otherwise will not | |||
exceed 75% of the total number of Green Bonds to be issued under this | |||
Prospectus under any circumstances, unless there is an under subscription from | |||
the other investors (investors that do not fall under preferential category). | |||
Alliance Finance Company PLC - Green Bond Issue 2025 | vii |
TABLE OF CONTENTS | ||
1 | CORPORATE INFORMATION | 1 |
2 | RELEVANT PARTIES TO THE ISSUE | 2 |
3 | LIST OF ABBREVIATIONS | 4 |
4 | GLOSSARY OF TERMS RELATED TO THE ISSUE | 5 |
5 | PRINCIPAL FEATURES OF THE GREEN BONDS | 7 |
5.1 | INVITATION TO SUBSCRIBE | 7 |
5.2 | SUBSCRIPTION LIST | 8 |
5.3 OBJECTIVES OF THE GREEN BOND ISSUE AND SPECIFIC RISK RELATING TO THE OBJECTIVES OF THE
ISSUE | 9 | |
5.4 | PAYMENT OF INTEREST | 14 |
5.5 | APPLICATION OF TAX ON INTEREST PAYMENTS | 15 |
5.6 | REDEMPTION OF GREEN BONDS | 15 |
5.7 | PAYMENT METHOD | 15 |
5.8 | TRUSTEE TO THE ISSUE | 16 |
5.9 | INDEPENDENT EXTERNAL VERIFIER | 16 |
5.10 | GUARANTOR | 17 |
5.11 | RATING OF THE GREEN BOND | 17 |
5.12 | RIGHTS AND OBLIGATIONS OF THE GREEN BOND HOLDERS | 18 |
5.13 | BENEFITS OF INVESTING IN GREEN BONDS | 18 |
5.14 | RISKS INVOLVED IN INVESTING IN GREEN BONDS | 19 |
5.15 | TRANSFER OF GREEN BONDS | 21 |
5.16 | LISTING | 21 |
5.17 | COST OF THE ISSUE | 22 |
5.18 | BROKERAGE FEE | 22 |
5.19 | UNDERWRITING | 22 |
5.20 | INSPECTION OF DOCUMENTS | 22 |
6 | PROCEDURE FOR APPLICATION | 23 |
6.1 | ELIGIBLE APPLICANTS | 23 |
6.2 | HOW TO APPLY | 23 |
6.3 | NUMBER OF GREEN BONDS TO BE SUBSCRIBED | 26 |
6.4 | MODE OF PAYMENT OF THE INVESTMENT BY THE APPLICANTS | 26 |
6.5 | REJECTION OF APPLICATIONS | 28 |
6.6 | BANKING OF PAYMENTS | 29 |
6.7 | BASIS OF ALLOTMENT OF GREEN BONDS | 29 |
6.8 | REFUNDS | 29 |
6.9 | CDS ACCOUNTS AND SECONDARY MARKET TRADING | 30 |
7 | THE COMPANY | 31 |
7.1 | OVERVIEW | 31 |
7.2 | FINANCIAL YEAR | 31 |
7.3 | STATED CAPITAL | 31 |
7.4 | MAJOR SHAREHOLDERS AS AT 30TH SEPTEMBER 2024 | 31 |
7.5 | DETAILS OF OTHER DEBT SECURITIES IN ISSUE | 32 |
7.6 | PARTICULARS OF LONG-TERM LOANS AND OTHER BORROWINGS OF THE COMPANY | 32 |
7.7 | DEBT SERVICING DETAILS OF THE COMPANY | 33 |
Alliance Finance Company PLC - Green Bond Issue 2025 |viii |
7.8 | CONTINGENT LIABILITIES OF THE COMPANY | 34 |
7.9 | LITIGATIONS AGAINST THE COMPANY | 34 |
7.10 | KEY FINANCIAL RATIOS | 34 |
7.11 | TAXATION | 35 |
7.12 | FINANCIAL STATEMENTS & FINANCIAL SUMMARY | 35 |
8 | BOARD OF DIRECTORS | 36 |
8.1 | DETAILS OF THE DIRECTORS | 36 |
8.2 | BOARD RELATED PARTY TRANSACTIONS REVIEW COMMITTEE | 36 |
9 | STATUTORY DECLARATIONS | 38 |
9.1 | STATUTORY DECLARATION BY THE DIRECTORS | 38 |
9.2 | STATUTORY DECLARATION BY THE MANAGERS AND PLACEMENT AGENTS TO THE ISSUE | 39 |
10 | FINANCIAL INFORMATION | 40 |
10.1 | ACCOUNTANTS' REPORT AND FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS | 40 |
ANNEXURE I - COPY OF THE RATING CERTIFICATE | 56 | |
ANNEXURE II - COPY OF THE INDEPENDENT ASSURANCE STATEMENT | 61 | |
ANNEXURE III - LETTER OF GUARANTEE | 63 | |
ANNEXURE IV - COLLECTION POINTS | 64 | |
ANNEXURE V - CUSTODIAN BANKS | 68 | |
ANNEXURE VI - FATCA DECLARATION | 69 |
Alliance Finance Company PLC - Green Bond Issue 2025 | ix
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