GL in Indonesia will stop issuing new loans due to JTA's actions
Mr. Tatsuya Konoshita, Deputy Chief Executive Officer of Group Lease Public Company Limited, stated "the Company's Board of Directors decided not to inject additional capital into the Company's subsidiary in Indonesia, PT Group Lease Finance Indonesia ("GLFI") and GLFI will stop issuing new loans and will only collect payments from its existing portfolio. It was required by the Indonesian Financial Authority ("OJK") to increase new capital into GLFI by the existing 3 shareholders (Group Lease Holdings Pte. Ltd. ("GLH"), J Trust Asia Pte. Ltd. ("JTA"), and PT Wijaya Infrastructure Indonesia) by roughly around USD 3 million or THB 98 million. However, JTA refused to increase the capital.
Not only did JTA refuse the capital increase, but due to JTA's actions in Singapore in getting the Singapore High Court to put GLH under an injunction, GLH cannot increase the capital by itself due to the injunction. The Company considered to increase such capital by itself, then a new minimum capital requirement would be implemented to GLFI. The new capital requirement is a requirement for all finance companies in Indonesia and to meet the requirement when bringing in additional shareholders. The Company would need to invest roughly USD 11 million or roughly THB 361 million in new equity into GLFI. However, due to the Covid-19 situation, JTA's lawsuits against the Company's group in various jurisdictions, and the Singapore injunction against GLH caused by JTA, the Company decided not to further invest into GLFI at this time.
The Company is disappointed JTA prevented GLH from investing into GLFI which will cause GLFI to not meet a capital requirement for OJK and thus prevent GLFI from being able to issue new loans. GLFI will continue to collect payment from its existing portfolio. The Company is reviewing with our legal advisors to see what action to take due to the harm JTA has caused GLH, GLFI, and the Company. We will continue to fight for our shareholders and protect our business."