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Tuesday, March 8, 2011

Nation Lanka Finance at decisive juncture

By Jithendra Antonio

The shareholders of the of Nation Lanka Finance PLC (former Ceylinco Group company) are expected to take a strategic decision on its proposed private placement and the rights issue, at the Extraordinary General Meeting (EGM) scheduled for tomorrow.

“This EGM will be very decisive as they need a minimum of 75% votes to approve the private placement and rights issue”, an industry source said Mirror Business.

The CSF board resolved to issue of 59,958,150 shares by way of rights to the existing shareholders at a price of Rs.5 per share, and to issue 100,000,000 shares by way of a placement to a consortium of investors at a price of Rs 5.per share. Current stated capital of the company is Rs.518,335,960 million represented by 39,972,100 ordinary shares.

Subsequent to the proposed private placement, Nation Lanka Finance PLC’s public holding will be decreased to 44.79% from 80.46% which was as at 31 December 2010.

Further, the ownership of Nation Lanka Finance would be taken over by the consortium of investors led by Asanga Seneviratne’s Investor Access Equities (Private) Ltd. (70 million shares), Nawaloka Construction Company (Private) Ltd.(14 million shares), Jayaprakash Rudra (16 million shares) immediately upon the approval of the majority of public shareholders of the company.

Meanwhile industry sources say, there had been a document circulating among the shareholders saying ‘to Approve the Rights Issue and Reject the Placement’ as it enable the existing shareholders to enhance the value of its rights whilst it will also allow the company to raise Rs 300 million, which would adequately help the company to turn its business around.

According to the document in circulation the sale of the controlling interest at Rs.5 per share or for a total Rs.500 million is far below the real value of the company.

“This is clearly manifested by the current market price which is in excess of Rs.20 per share both prior to and after the announcement.” the document outlined.

Nation Lanka Finance has diverse interest in the financial sector of the country with a deep routed branch network, large land bank, flagship stock brokering company Ceylinco Stock Brokers and number of other property and financial services sector subsidiaries.

source - www.dailymirror.lk