Heads for IPO:

Union Bank rights issue oversubscribed

The innovative fund raiser of Union Bank consisting of a rights issue, a private placement and a subsequent Initial Public Offering that received a remarkable level of

attention from both local and foreign investors moved in to an exciting phase with the preliminary stage of the process, the Rights Issues held on December 23 issuing 10 million shares at Rs 25 to the existing shareholders being oversubscribed by four times.

The next phase of the fund raiser will be the private placement of additional 20 million shares. The shares would be issued on a tender basis and will incorporate a book building process, which is unique to Sri Lanka.

Subsequently, 15 million shares will be issued through the proposed Initial Public Offering (IPO) planned for the first quarter of 2011.

Analysts state that this is a much sort after and a rare investment opportunity. The bank is working with its advisors NDB Securities and Acuity on the proposed IPO. On completion of this multi-stage process, the bank will fulfill all Central Bank requirements pertaining to capital adequacy until year 2015.

Union Bank Director and Chief Executive Officer Anil Amarasuriya said "The over subscription of the Rights Issue highlights the confidence expressed by our existing shareholders." He said that "We are entering an exciting phase, the country's per capita income is expected to double in five years and the banking industry is poised as a key growth sector thus, concurrently highlighting exciting future opportunities for Union Bank.

"The bank plans to raise in excess of 1.1 billion through the above funding methodologies and expects to support the implementation of the bank's ambitious expansion and consolidation programs in the next couple of years. To this effect, we will be making further announcements on our organic and inorganic growth plans for the bank," he said. Amarasuriya said that the bank's plans are on track, supported by sound financial standing, network expansion, value addition to its products, image building, and technology upgrades the bank is well geared to becoming a power house in banking.