Diversified manufacturing and trading conglomerate, Lankem Ceylon PLC, is gearing up for a rights issue worth Rs.480 million in the near future to settle inter-company borrowings and working capital requirements.
The issue, which is subject to approvals from the Colombo Stock Exchange and Lankem shareholders, will see 12 million new shares being issued in the proportion of one new share for every two existing shares, for a consideration of Rs.40 each.
Lankem shares were trading at Rs.57.40 per share last Friday.
For the nine months ended December 31, 2016, the Lankem group had made a Rs.28.42 loss per share, deteriorating from a Rs.11.90 loss per share year-on-year, while revenue remained flat at Rs.12.27 billion.
Net assets per share were Rs.79.38 as at December 31, 2016, falling from Rs.108.63 per share at the start of the financial year.
Loans due to related parties constituted Rs.428.10 million, while Rs.6.23 billion worth of interest bearing borrowings were recorded in the latest
Meanwhile, J. F. Packaging (Private) Limited, a subsidiary in which Lankem recently gained full ownership, has purchased a PET bottle manufacturer named Kiffs (Private) Limited for Rs.225 million on the same day the Lankem board opted to go for a rights issue.