AFL's rating incorporates its association with the David Peiris Group as its sponsor and major shareholder. Demonstrated support of the sponsor and group synergies augments its business profile. David Pieris Group, through David Pieris Motor Company, is the exclusive supplier of "Bajaj" motors in Sri Lanka. The group's strong financial position and presence in the auto industry positively influence AFL's rating. AFL remains a mid-sized position, with its asset base representing around ~2.5% of the industry’s total assets. Going forward, the Company aims to strengthen its presence in the 2 and 4-wheeler markets while maintaining its exposure to 3-wheelers to sustain its NPL ratio below the industry average.
AFL is poised to issue a listed, rated, unsecured, senior, redeemable debenture to bolster the Company’s lending portfolio, fostering further growth and operational expansion. In line with the best practices, Messrs Ernst & Young Chartered Accountants Sri Lanka have been appointed as the Independent External Verifier for this transaction.
AFL's rating remains contingent upon its ability to effectively execute its strategic objectives and enhance market presence while maintaining sound financial discipline and strong asset quality. The rating of the debenture is dependent on the optimal deployment of proceeds from the issuance, coupled with the timely payments of the interest and principal amounts to the respective debenture holders, in the manner set out in the Trust Deed to the transaction.