Dialog IPO oversubscribed mainly due to foreign demand :

Major vote of confidence in Lanka - CEO

by Channa Kasturisinghe

Investors, specially foreigners have grabbed with both hands the opportunity to become shareholders of Sri Lanka's premier cellular telecommunications operator. The Dialog IPO was oversubscribed by 3 to 4 times with 25,000 local applications before the closing time of 4.30 pm yesterday and as expected the major demand has been from foreign investors.

According to sources leading investment banks and fund managers from the US, Europe and Hong-Kong had been among foreign investors. The 40 percent shares allocated for this category was oversubscribed by 8 to 10 percent.

"This reflects a major vote of confidence in Sri Lanka by foreign investors at a time of political uncertainty," said a jubilant Dialog Telekom CEO Dr. Hans Wijayasuriya. "We are extremely honoured by the tremendous response received from the public - we would like to thank everybody who has placed their trust in us, and we will do our utmost to deliver on that trust as we go forward", he said.

Sri Lanka's largest ever IPO was over-subscribed approximately 1 hour after its opening on the morning of 7th July 2005. At 10.07 am yesterday of the Registrars to the issue, SSP Corporate Services released a statement to the Colombo Stock Exchange (CSE) confirming the over-subscription of the issue. The Registrars to the issue are expected to provide confirmation pertaining to the level of over-subscription over the next days following the validation and entry of all applications.

The issue consisted of 712,336,293 Ordinary Shares of par value of Rs.1/- each offered at the Share Offer Price, which would be determined through a book building process based on price range of Rs. 8.0 - 12.0 in steps of Rs 1/-. Investors were invited to bid at an offer price of their choice within the specified range.

The share offer price will be Rs.12 as most of the applications were for that price, said Vajira Kulatilleke, CEO of NDB investment Bank which is the Manager to the offering.

"He said local institutional investors category and other local investor categories which consist of 25 percent and 35 percent of the offered shares too were over subscribed. "As all the three categories were oversubscribed there is no need of claw-back and redistribution," he said.

Kulatilleke said the issue will come to the secondary market later this month probable on July 29 where the share price is expected to trade at Rs.13.50 and Rs.15.

Dialog Telekom provides the widest cellular coverage in the country, and serves over 1.5 Million customers from across all nine provinces of the island. The Company's subscribed base accounts for (approximately) 60% of the country's mobile sector and 40% of total telecommunication subscribers.