Ironwood Investment Holding (Pvt) Ltd. has increased its stake in Abans Finance PLC (AFSL) to 31.89 percent. Ironwood acquired 10.16 million AFSL shares for Rs.25 each through a rights issue, constituting 15.25 percent of the total shares in AFSL. Prior to the rights issue, Ironwood held 11.07 million shares in AFSL, equal to 19.95 percent of the shares in AFSL.
The 21.23 million shares Ironwood holds in AFSL now constitutes to 31.89 percent of its total shares. A market source said that AFSL parent Abans PLC, which held 71.60 percent of shares in its subsidiary prior to the rights issue, may not have subscribed to its full allotment of rights, allowing Ironwood to buy extra rights. It is not yet clear whether Abans and Ironwood could be classified as related parties, which may allow Ironwood to not opt for a mandatory offer. Even if a mandatory offer is announced, Ironwood would have to purchase all remaining shares for Rs.25 each since it is the highest price Ironwood had purchased AFSL shares during the past year. Ironwood entered AFSL through a private placement in last November where it purchased 11.07 million AFSL shares at Rs.25 each. AFSL shares were trading almost Rs.36 per share yesterday. The rights issue, which raised Rs. 277.34 million, was intended to improve AFSL’s future minimum capital adequacy requirements.