SDB bank eyes to raise up to Rs.4.5bn via proposed secondary public offering

Sanasa Development Bank PLC (SDB bank) eyes to raise up to Rs.4.53 billion from the proposed issuance of 88 million new ordinary voting shares to the public via a secondary public offering (SPO), after arriving at a price of Rs.51.50 per a share.

On April 5, the bank disclosed plans to issue up to million new ordinary voting shares to the public via an SPO in two tranches, which initial issuance of 68 million followed by further issuance of 20 million shares in the event of an oversubscription of the initial issue at the discretion of the board of directors of SDB.

“As communicated via the aforesaid disclosure and the circular to shareholders and notice of meeting dated May 3, 2021 and as decided by the board of directors of SDB, the aforesaid new ordinary voting shares under the SPO will be issued at a price of Rs.51.50 per ordinary voting share, determined based on the one-month Volume Weighted Average Price (VWAP) of SDB share as at May 20, 2021, i.e. three market days prior to the Extraordinary General Meeting to be held on May 28, 2021,” the bank revealed in a market disclosure yesterday. The closing price of an SDB share was recorded at Rs.52.20 on the Colombo Stock Exchange (CSE) at the end of the trading session yesterday.

Accordingly, SDB expects to raise Rs.3.5 billion in the initial issuance of 68 million and Rs.1.03 billion in the further issuance of 20 million shares in the event of an oversubscription of the initial issue. Overall, SDB is looking up to raise Rs.4.53 billion.

An Extraordinary General Meeting is scheduled for 28th of month to secure the final shareholder approval for the 
proposed issuance.

With the anticipated fresh capital from the proposed SPO, SDB views to further enhancing the bank’s capital adequacy ratios and to partly finance the envisaged growth in the loan portfolio in the near term.