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Monday, June 20, 2011

LDEV gets only Rs.1.32 billion from rights issue

By Jithendra Antonio

Though Lankem Ceylon PLC (LCEY) subsidiary Lankem Developments (LDEV) was to raise Rs.2.5 billion via rights, it has only managed Rs.1.32 billion as at June 7 as per a stock exchange statement by the company.

However, in May Mirror Business exclusively reported that many investors in the outskirts of Colombo have missed to accept Lankem Developments (LDEV) rights entitlement or to deposit rights through renunciation to Central Depository System (CDS) due to the postal delivery delay that prevailed in the country.

An announcement by the company on June 7 to Colombo Stock Exchange said, the company had only been able to list 53.1 million shares pursuant to the 15 rights per share issue whilst earlier on March 2011 LDEV said it was hoping to issue 103.5 million rights to existing shareholders. Prior to the rights issue Lankem Developments (LDEV) stated capital was valued at Rs.80,505,620 representing 6.9 million.

Back in march LDEV said it had decided to come up with the rights issue in a bid to raise Rs.2.5 billion for an investment in acquisition of 61.88% of Agarapatana Plantations Ltd and for further investments in plantations, leisure industry and hydro power plants.

In a stock exchange filing, Lankem Developments said it will issue 15 rights per share at a price of Rs.25 each to acquire 47,417,276 (61.88% stake) ordinary shares of Agarapatana Plantations Ltd at a total cost of Rs.1.185 billion.

In another filing to the stock exchange, Kotagala Plantations (KOTA) said it is expected to earn Rs.150 million disposing 6 million shares of Agarapatana Plantations to Lankem Developments.

As the rights issue had only been able to raise nearly half of the anticipated Rs.2.5 billion, market sources are of the view that the company would now only be able to acquire a controlling stake of Agarapatana Plantations whilst the LDEV share value is stagnated at an undervalued price range of Rs.19 to Rs.20.

source - www.island.lk