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Thursday, June 2, 2011

Key investor sheds CSF shares

By Jithendra Antonio

One of the key investors who pumped money into Nation Lanka Finance (CSF) in a Private Placement deal, Jayaparakash Rudra has shed nearly 580,800 shares of CSF at a price ranging from Rs.29.80 to Rs.30.20 on May 30.

This sale came amid Nation Lanka Finance PLC’s (CSF) extraordinary share price hike that continued since conclusion of a rights issue. The share went up from Rs.14 in early May to Rs.31 the end of the month.

Jayaprakash Rudra initially invested in 16 million shares of CSF for a total consideration of Rs.80 million at a fairly undervalued price of Rs.5 per share in the private placement that took place in March 2011.

However, back in March 2011, at the time of announcing the new consortium of investors’ to infuse capital to former Ceylinco owned Nation Lanka Finance PLC (CSF), lead investor of new consortium Asanga Seneviratne stressed the new consortium will be committed for the company’s long-term growth, though certain news reports had predicted new investors may exit in the short-term after buying company shares at a fairly undervalued price of Rs.5 per share.

Rudra’s sale of shares took place just before the release of CSF financials for the quarter ended in 31 March 2011.

When Mirror Business inquired about Rudra’s sale of shares from CSE, a Colombo Stock exchange official said that there’s only a rule that restricts a director selling company shares within two market days, since the release date of financials.

“There’s no rule pertaining to a director selling shares before the release of financial results. However, if a Director had sold with price sensitive information, SEC should definitely investigate.’

Subsequently CSF share prices fell by Rs.1.70 yesterday (down 5.31%) to close at Rs.30.30 compared March 31 high closed price of Rs.32.

Meanwhile, the quarterly results of Nation Lanka Finance (CSF) said that the company’s turnover had fallen by 21% a year ago from Rs.1.72 billion to Rs.1.36 billion as at 31 March 2011, whilst the company had minimized its losses from Rs. 1 billion to Rs.216.2 million.

Consequently, Nation Lanka Finance (CSF) Loss Per Share (LPS) had been minimized from Rs.42.52 to Rs.5.21, and Net Asset Value had become positive at 45 cents compared to negative value of Rs.15.30, a year ago.

However, financials outlined that company’s assets had decreased from Rs.6.1 billion to Rs.3.7 billion for the twelve months ended in 31 March 2011.

source - www.dailymirror.lk