FIMBank plc issued its Interim Directors Statement on 14 May confirming that during the first four months of the year to 30 April 2008, the financial position of the Group remained sound and the performance to date suggests that the strategic choices made, including the planned diversification through new investments, have been the right ones.
The Directors also confirmed the size of the expected capital gain from the sale of the 38.5% holding in Global Trade Finance Limited (GTF). This divestment was confirmed in a Company Announcement issued on 25 March 2008, wherein it was stated that FIMBank had entered into an Agreement for the sale of its shares to the State Bank of India for a gross consideration of INR2.17 billion, equivalent to about USD54.1 million. The Directors noted that after deducting taxes and the net book value of the investment in GTF (but not allowing for the effects of movements in exchange rates), a gain of about USD36.5 million at the Company, solo level, or USD29.3 million at Group, consolidated level, is expected to materialise. Moreover, at the consolidated level about USD2.3 million of the gain will be booked as ‘share of profits from equity accounted investees’ since the sale took place at the end of the first quarter for 2008.
The Directors also explained that during the financial year ended 31 December 2007 GTF’s contribution to the FIMBank Group was significant at USD 5.2 million. However the Directors stated that “its absence from the second calendar quarter onwards is not anticipated to have a material impact on the results for 2008 since the increase in Group business activity should have an overall compensating effect”. The Directors revealed that the Group’s financial results for the first four months of 2008 confirm the positive progress achieved to date in this respect.
FIMBank’s Directors explained that the contribution from the other factoring joint-ventures, MENAFACTORS in Dubai and Egypt Factors in Cairo, is expected to be more encouraging for the rest of this year and noted that FIMBank is currently concluding negotiations to increase its equity support to MENAFACTORS. FIMBank is also planning to develop further factoring business in Latin America.