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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2587

BoC to support CPC with syndicated credit facility

By Ashwin Hemmathagama - Financial Correspondent

Colombo, 07 June, (Asiantribune.com):Bank of Ceylon (BoC) has called quotations for a syndicated credit facility for US $ 250 million from foreign financial institutions.

According to industry sources, this syndicated financial credit facility will be utilized in shouldering the heavy oil import bills of the Ceylon Petroleum Corporation (CPC). “This special facility will be used to settle the excessive oil import bills of the Ceylon Petroleum Corporation during the next few months,” the source said.

This syndicated credit facility will be borrowed for 3 years on a special interest rate. “We are looking at borrowing on LIBOR (London Inter Bank Offered Rate) plus a nominal percentage. Most of the foreign banks are expected to forward their proposals which would enable us to decide the applicable interest rate,” the source added.

CPC Chairman Jaliya Madegama explaining the background for this syndicated financial facility said: “We have a good balance sheet which gives us better standing when it comes to financial assistance, as and when the requirements arise. This has been a normal practice and CPC has such arrangements with Peoples Bank and some of the reputed foreign financial institutions as well.”

In keeping with the growing international oil prices CPC has also recommended a recent price increase which is yet to be implemented. “The proposed price increases are recommended according to pricing formula. During the month of April our petrol refining cost was Rs. 100/- per liter which was sold at Rs. 88/-. Diesel refining cost was Rs. 69/- where it was sold at Rs. 58/-. This gives a clear-cut loss for the government. Kerosene, mainly used by factories, is to nearly double to around Rs. 67 per liter from the current Rs. 38 per liter,” he added.

Sri Lanka refines 3.6 million metric tones annually with users guzzling around 30 million liters of petrol, 130 million liters of diesel and 18 million liters of kerosene each month.

- Asian Tribune -

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