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Friday, July 1, 2011

Central Finance to increase share capital

By Jithendra Antonio

Central Finance Company PLC (CFIN) which remained strong during the 2008 industry downturn, announced a sub division and capitalization of reserves of listed shares to its stakeholders yesterday.

In a filing to the stock exchange yesterday, CFIN said that it is hoping to increase its existing 20.3 million voting shares to 101.5 million voting shares by subdividing each existing share in to five. The Company will also thereafter issue a total of 3,383,333 voting shares on the ratio of 1 share for every 30 shares held by the way of capitalization of reserves at a price of Rs.108 per share. Accordingly, the company will capitalize a sum of approximately Rs.365.39 million from the general reserves of the company.

The filing said the subdivision is yet to be finalized and approved by shareholders at an EGM.

Since early 2011, Central Finance (CFIN) shares shot up over Rs.1700 (per share) due to high illiquidity, and market sources speculated about a possible takeover by a group of investors led by Perpetual Capital and Browns fame. Meanwhile, Central Bank’s Monetary Board managed country’s largest pension fund, EPF on Tuesday bought a 2% stake in CFIN just two days before CFIN’s announcement of share subdivision. Market analysts are also of the views that EPF has been actively following several major quantity buyouts of listed companies by Arjun Aloysius led Perpetual Capital and Browns fame since early this year that came in to light after EPF bought major stakes of Laugfs Gas (LGL) and Grain Elevators (GRAN). EPF recently bought stakes in Richard Pieris from Ajith Devasurendra.

As at 31 March 2011 Corporate Services Ltd had a 17.44% stake in CFIN with 3.54 million shares, and E.H. Wijenaike had a 15.41% stake with 3.12 million shares whilst Arjun Aloysius led Perpetual Capital held 9.16% stake of CFIN with 1.86 million shares.

Meanwhile in a another filing, CFIN said its directors, M.S. Wijenaike, G.C.B. Wijesinghe and C. Kiriella resigned from the Board with effect from 30 June 2011, and Chairman of Finlays Colombo PLC, Chandima Lalith Kumar Perera Jayasuriya, General Manager Credit of CFIN Dhammika Prassanna De Silva and Chairman of MILCO Sunil Wickramasinghe have been appointed to the board with effect from 1 July 2011.

As at 31 March 2011, C.Kiriella had 187,322 shares of CFIN representing a 0.92% stake in the company.

source - www.dailymirror.lk