Sale of Cambodian micro finance stake : LOLC likely to make disclosure this week | Sunday Observer

Sale of Cambodian micro finance stake : LOLC likely to make disclosure this week

LOLC Holdings Plc is likely to make a formal disclosure early this week on the sale of its 70% stake in Prasac Microfinance Institution Ltd., Cambodia, market sources revealed.

Korea’s KB Kookmin Bank is to buy LOLC’s Cambodian microfinance arm for a staggering $ 603.4 million or Rs. 108.5 billion, subject to regulatory approval, according to international media reports.

Reports said, its Board has agreed to buy 70% stake in Cambodia’s PRASAC Microfinance Institution for $ 603.4 million from LOLC. PRASAC Microfinance is the No. 1 microfinance deposit-taking institution, taking up over 40% of market share in Cambodia with 177 branches. A report in Korea Herald stated that KB Kookmin will close the deal within three months, after due diligence and approval from financial authorities in Korea and Cambodia.

The deal is expected to allow KB Kookmin to consolidate its consumer banking network in the Southeast Asian nation. Operating six bank branches, KB Kookmin earned preapproval in Cambodia for the acquisition in May. KB Kookmin said it plans to buy the remaining 30% stake in the institution at least two years after the transaction.

LOLC had earlier revealed to the media that ‘the company will use the funds to acquire microfinance firms in emerging markets from Brazil to India’.

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