Private placement and public share issue:
Seylan Bank shareholders give green light
The shareholders of Seylan Bank PLC at an Extraordinary General
Meeting yesterday unanimously approved the proposed private placement of
shares and public issue of share at Rs. 35 per share.
The shareholders also adopted the new Articles of Association in
conformity with the Company’s Act of 2007.
During the past four months the Bank gained additional deposits of Rs.
4 bn while its ordinary voting share traded at a high of Rs. 47 per
share in 2009.
Through the private placement, 32,150,000 ordinary voting shares will
be issued of which 13 mn shares (10 percent) will be taken up by Bank of
Ceylon and 19.15 mn shares will be taken up by the Sri Lanka Insurance
Corporation.
Their collective stake in the Bank would amount to 25 percent of the
increased capital of the Bank.Through the Public Share Issue, 54.3
million ordinary voting shares will be offered to the public which
includes local and foreign investors.
Existing shareholders are also eligible to apply and will be entitled
to a preferential allotment upon application, on the basis of one share
for every two shares they hold as at end of trading yesterday.
The unanimous adoption of both special resolutions by the
shareholders sanctioning the private placement and the public issue at
Rs. 35 per share, bears ample testimony to the trust and confidence
placed by the shareholders in the Board of Directors and management of
Seylan Bank.
A bank spokesperson said that the new capital to be raised will have
a significant effect on the smooth running of the bank and will enable
the Bank to enhance its advances portfolio by making well-evaluated
advances. Such lending on a strictly monitored basis will increase the
bank’s revenue. The funds raised will also enable the bank to expand its
branch network, particularly in the now accessible North and East of the
country.
The funds will also enable the Bank to minimize the Bank’s long term
interest rate risks and achieve acceptable interest rate gap exposure.
It will also enable the bank to enter the long term housing sector.
The bank’s ordinary voting shares have traded at a high of Rs. 47 per
share in 2009. The net asset value per share (including non voting
shares) currently stands at Rs. 42.
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