The tableware exporter said in a statement is has entered into an agreement with a consortium consisting of Environmental Resources Investments (ERI) and Ceylon Leather Products (CLP).
They will invest 433.5 million rupees through a private placement of 48 million shares at nine rupees a share.
Dankotuwa shares closed at 20.75 rupees, up 3.50 or a steep 20 percent Thursday, having hit a high of 22.50 in intra-day trade.
The consortium will hold 66.67 percent of Dankotuwa. ERI will take 42 million shares or a 58.36 percent stake and CLP six million shares or 8.31 percent.
Dankotuwa Porcelain’s present stated capital as of March 31, 2010 is 246 million rupees represented by 24 million shares.
The firm had previously considered liquidation owing to mounting losses and labour union resistance that had delayed its deal with the new investors who had demanded a two-year wage freeze.
Dankotuwa, which had found itself priced out of export markets owing to rising labour, energy and gold costs, said the investment will be used to restructure and expand operations.
The issue of shares through a private placement is subject to shareholder and regulatory approval.
Ceylon Leather Products said Wednesday it plans to raise fresh capital to settle debt, expand and invest in new ventures by issuing rights.
source - www.lbo.lk
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