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LOLC GROUP ACQUIRES MAJORITY STAKE IN TPC CAMBODIA FROM DEVELOPING WORLD MARKETS
Phnom Penh, Cambodia (12 September 2014) – Thaneakea Phum (Cambodia) Ltd. (“TPC”) announced today the sale of a 55.5% equity stake in TPC by DWM Asset Management LLC (“DWM”), a US-based fund manager specializing in inclusive finance investments in emerging markets to LOLC Micro Investments Ltd. (“LOMI”), a wholly-owned subsidiary of LOLC PLC. The TPC employee association also participated in the transaction, selling a 4.5% stake to the same buyer which will now control 60% of shares. DWM will remain a significant minority shareholder after the acquisition with 37.0% of outstanding shares.
TPC is a rapidly growing, regulated microfinance institution with a focus on serving low-income families and entrepreneurs mainly in rural Cambodia. One of the first MFIs to operate in Cambodia, TPC was founded in 1994 and celebrated its 20th anniversary today. TPC currently offers a range of loan products, including group, individual, agricultural, and home improvement loans, and in 2014 became 5th largest MFI in Cambodia with 170,000 clients and total assets of $110 million.
LOLC was established in 1980 as a pioneering provider of leasing products in Sri Lanka and has since expanded to offer a range of financial and non-financial products and services. In 2009, LOLC established a microfinance subsidiary in partnership with the Dutch development bank FMO. This subsidiary, LOMC, is currently an industry leader with over 200,000 clients and was recognized in February 2014 as the first Sri Lankan microfinance institution to receive Client Protection Certification from the Smart Campaign.
With this acquisition, LOLC will expand its presence in Southeast Asia and further establish itself as a regional financial services leader. LOLC began microfinance operations in Myanmar in 2013 and also holds a minority stake in Cambodian SME lender Prasac.
“DWM has enjoyed the opportunity to be TPC’s majority shareholder and to transform the institution in the last 4.5 years, bringing it to be the 5th largest microfinance institution in the country,” said Fernanda Lima, Chairperson of TPC’s Board of Directors and Director of East & Southeast Asia Private Equity for DWM. “After careful consideration, we strongly believe that LOMI is the right partner for TPC. With LOMI as its strategic shareholder, TPC will have enhanced resources and capability to continue to significantly develop in a sustainable and responsible manner, whilst remaining true to its original mission of serving lower-income families and small businesses in rural and per-urban areas with affordable financing.”
Ravi Tissera, Director and CEO of LOMI, said, “We at LOMI are tremendously excited about our strategic partnership with TPC. Though it has made significant strides in recent years, Cambodia’s financial services sector remains underdeveloped. There is a large opportunity for innovative financial services firms to increase their impact across the country, and we look forward to working with TPC’s management and employees to provide sustainable financial services that improve the lives of clients.”
Sok Voeun, TPC’s CEO, added, “LOMI is an experienced strategic shareholder with a strong operational track record. This partnership will enable TPC to expand its product offering and support the company’s continued growth. Furthermore, LOMI shares our commitment to responsibly serving clients and is a strong social fit for TPC, especially as we scale up our financial literacy training program and work towards Client Protection Certification.”
The TPC management structure and its 100% local senior team will remain in place, with Sok Voeun and Sok Sophal continuing as CEO and CFO. The transaction received regulatory support and approval both in Sri Lanka and Cambodia and was completed in September 2014.
About TPC
Thaneakea Phum (Cambodia), Ltd. (“TPC”) is a rapidly growing, regulated microfinance institution with a focus on serving low-income families in rural Cambodia. TPC was established in 1994 and is currently the 5th largest MFI in Cambodia. As of July 2014, TPC serves 169,873 clients via its network of 51 branch offices in 22 provinces, and over the last twelve months TPC has grown its gross loan portfolio by 50% to US$95.6 million. This growth has been responsibly managed to ensure a top-quality portfolio, and PAR >30 days is currently at 0.13%. www.tpc.com.kh
About Developing World Markets
DWM is a specialized asset manager dedicated to making socially positive investments primarily in inclusive financial institutions, including microfinance institutions, MSME, and affordable housing and education lenders. Our goal is to deliver financial products to inclusive financial institutions in an efficient, affordable and financially sustainable manner, and at the same time deliver an appropriate risk-adjusted return for our investors. DWM manages $450 million primarily on behalf of institutional investors as of June 30, 2014. DWM has financed over 140 inclusive finance institutions in over 40 countries, and currently has a staff of 35 people, speaking over 20 languages. "http://www.dwmarkets.com
About LOMI
LOMI, wholly owned by Lanka Orix Leasing Company Plc (LOLC), a public listed company in Sri Lanka. LOLC was established in 1980 as a pioneering provider of leasing products in Sri Lanka and has since expanded to offer a range of financial and non-financial products and services. As of 31 March 2014, LOLC reported total assets of approximately USD 1.3 billion. In 2009, LOLC established a microfinance subsidiary in partnership with the Dutch development bank FMO. This subsidiary, LOMC, has become an industry leader and was recognized in February 2014 as the first Sri Lankan microfinance institution to receive Client Protection Certification from the Smart Campaign. LOLC also began microfinance operations in Myanmar in 2013 and holds a minority stake in the Cambodian SME lender Prasac.
Front row from left to right: Mr. Loung Phealin, Mr. Kithsiri Gunawardena, and Ms. Fernanda P.L. de Lima. H.E. Kim Vada and H.E. Chan Thy joined as witnesses in the second row on the left hand side.
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