Decided upon at a meeting on 27 September but disclosed only yesterday, Touchwood Board has approved a capitalisation of reserves amounting to 35.63 million shares on the basis of one for every two held.
The consideration for which shares are to be issued is Rs. 311.8 million or Rs. 8.75 per share. Touchwood’s current stated capital is Rs. 623.6 million.
The value of the reserves to be capitalised (Rs. 311.8 million) is out of the revaluation reserves of Rs. 477.45 million.
The company said the revaluation reserve represented revaluation of land, done in 2010 by chartered valuer K.S. Wijesooriya. “The valuation of the revaluation reserve amounting to Rs. 477.4 million does not arise from the fair valuation of biological assets,” the company said.
The Board’s resolution is subject to regulatory and shareholder approval.
Yesterday Touchwood saw six million of its shares change hands via 1,600 trades for Rs. 114.7 million, the biggest contribution. The share price hit an intra-day high of Rs. 21.50 before closing at Rs. 19.10, up by 40 cents.
On Monday 7.2 million traded for Rs. 146.7 million though profit taking saw share price dip by 2.60 to Rs. 18.70.
Most analysts have labelled Touchwood as a speculative stock though some think it has future value. Its net asset per share is Rs. 48.24 and earnings per share in FY12 was Rs. 5.18.
source - www.ft.lk