Lankem Group’s Kotagala Plantations PLC yesterday announced plans to raise Rs.800 million though a rights issue and go for a share subdivision upon the completion of the proposed rights issue, subject to shareholder and Colombo Stock Exchange approval.
Accordingly, the plantation company plans to issue 80 million ordinary shares at a price of Rs.10 per share in the proportion of two new ordinary shares for every one existing issued ordinary share.
Kotagala Plantations share closed at Rs.13 at the end of yesterday’s trading, down Rs.2.50. The trading of the shares was briefly halted before the announcement of the rights and subdivision of the shares.
The company said the rights issue proceeds will be utilized to settle outstanding statutory liabilities and to meet working capital requirements.
The stated capital of the company is Rs.680 million. The rights issue will not be underwritten.
As at June 30, 2016, Kotagala’s net assets per share stood at Rs.41.97, down from Rs.55.04 a year ago.
Meanwhile, following the completion and full subscription of the proposed rights issue, the company will carry out a share split subdividing every two ordinary shares into three
This move will increase the number of shares of the company to 180 million from the 120 million shares subsequent to the full subscription of the proposed rights issue.
“In the event of aforementioned rights issue is undersubscribed, the number of shares to be subdivided and the increased number of shares arising out of such subdivision would be a lesser amount than is stated above,” the company said in a stock exchange filing.
The share subdivision will be effected after 20 market days from the date of the acceptance of the rights issue.
The Kotagala Plantations group narrowed its net loss in the June quarter (1Q17) to Rs.13.4 million from Rs.183 million a year ago amid gains from other income. But the top-line of the group fell to Rs.1.5 billion from Rs.2 billion a year ago.