Sampath Bank to raise Rs.20bn via rights and debentures

Sampath Bank PLC continued to sate its hunger for capital to meet regulatory requirements and expand business with the bank’s director board this Monday approving plans to raise Rs. 20 billion through debt and equity, just days after the bank raised Rs. 13.6 billion for the same purpose.

A filing to the Colombo Stock Exchange yesterday said that the bank’s board of directors had approved plans to issue up to 50.1 million new shares via a right issue, in the proportion of three new shares for every 13 existing shares. The shares will be issued at a price of Rs. 250 per share, raising Rs.12.5 billion.

The board also decided to issue 50 million 5-year BASEL III compliant convertible debentures, with an option to extend the issue by another 25 million debentures in the case of oversubscription. Each debenture is valued at Rs. 100.

The two fund raising activities are subject to necessary regulatory, shareholder and other approvals.
Earlier this month, Sampath Bank raised Rs. 7.6 billion through a rights issue, and as early as last week, raised Rs.6 billion through BASEL III compliant convertible debentures. As a large bank with assets exceeding Rs.500 billion, Sampath Bank is required to meet a Tier I capital ratio of 8.875 percent by January 2018, and 10 percent by January 2019, while total capital ratios are required to reach 12.875 percent and 14 percent respectively, according to BASEL III requirements.

Before the fund raising activities which took place earlier this month, the bank’s Tier 1 capital ratio stood at 8.46 percent, while the total capital ratio stood at 11.85 percent.

Sampath Bank’s current stated capital is Rs. 16.31 billion. As per the requirements of the Sri Lankan government, each bank is required to have a minimum capital base of Rs. 20 billion by end-2020.