Richard Pieris to raise Rs. 1b in Rights issue

THE BOARD of Directors of Richard Pieris & Company Ltd. has decided to raise Rs. 1 billion through a Rights issue of two shares for every nine shares at a price of Rupees Thirty Five (Rs. 35) per share.

The company has in recent years made substantial investments; including the purchase of controlling interest of Kegalle, Maskeliya and Namunukula Plantations, acquisition of 10 per cent holding of NDB, rapid expansion of retail infrastructure and other key sectors.

The above investments were largely funded by bank borrowings. As a result the company’s total debt and gering have increased over the last few years.

Company’s Chief Operating Officer Pravir Samarasinghe said, “The high inflationary environment in the country and the resultant increase in interest rates in the last 12 months by almost 6%-8% on Rupee borrowings has impacted company’s performance adversely.

“At the present debt and interest rate levels the Board of Directors feel the company’s performance and its future growth potential is being considerably impeded by the current high finance cost,” Samarasinghe said.

“Directors feel equity funding is necessary at this point in time to strengthen the Balance Sheet,” Samarasinghe said. The company plans to utilise the proceeds of the Rights Issue solely in retiring debt.