Capital Reach to raise Rs. 55.8 m in shares

Anjana Samarasinghe

Capital Reach Leasing Ltd (CRLL), a subsidiary of Capital Reach Holdings will go for 3.1 million share issue to raise Rs 55.8 million in December.

The company plans to list its shares on the second board of the Colombo Stock Exchange through the offer for sale of a portion of the Holding Company’s shares in CRLL.

Capital Reach Holdings has 66.57% shares of the company. Through this public issue they expect to offer 15% of their shares to the public, which they hold at the moment. Vanik Incorporation Limited holds 32.54% of the company’s shares while Sri Lanka Cooperative Rural Banks Federation holds 0.89%.

Speaking at the press conference Chairman of the CRLL, Mayura Fernando said through this share issue the company will have the opportunity to list its debt instrument in the future.

“To list our debt instruments, first of all we need to be listed in the CSE. This share issue will also help us to go further to the public,” he said.

“We do not want more equity for the company and we do not want to dilute our company shareholding structure. So we thought of issuing 15% of the shares that our mother company holds to the public. In future we will be focusing on expanding our equity,” he said.

During any public offer, companies do their share valuation according to the company’s past performances. But we have valued on the basis of the future earning potentials as our company is a young company as it is in the growth stage. Based on the performance up to August, the company expects to pay a dividend this year. The value at which the share is offered therefore is a discounted price which the investors are expected to grab.The shares are being offered at Rs 18 and offer for sale opens on December 8, he said.

However, the company has projected to double its total income within five years’ time which will be Rs 773.4 million. Company expects to increase its branch network and introduce new products to the market specially saving accounts.

“We expect to introduce ATM cards for our account holders in the near future. Pawning is another area the company expects to venture next year.

The company also embarked on the real estate business too,” he said.

Despite the many challenges faced CRLL has been growing steadily over the last few years. The growth in the last year showed an increase in its lending portfolio by 71%, it’s gross income by 83% maintaining its profit growth of 38%.

During the last two and a half years the company has mobilised funds by way of securitisations from Banks and Public of more than Rs 1 billion.

The sesecuritisations have been placed with NAMAL, NSB, NDB and other investors and amounted to Rs 600 million.

The company raised Rs 225 million from public as fixed deposits during the last year and more than Rs 250 million from commercial banks over these recent years.