17 September 2018 10:17 am
Singhe Hospitals PLC last week said it received the shareholders’ approval to raise fresh capital by way of a private placement amid continued losses, and the management saying the company is facing a serious loss of capital.
Singhe Hospitals which runs a 50-bed hospital in Ratnapura has been losing money quarter after quarter since it went public in April 2015.
The company raised Rs.250 million at its IPO by offering 100 million shares at Rs.2.50 each. But the share price stayed below the IPO price ever since.
As of last week, the company’s stock ended 30 cents or 25 percent higher at Rs.1.50, which translates into a total valuation of little under Rs.600 million. During the quarter ended June 30, 2018, the company was able to narrow its losses to Rs.2.4 million from Rs.12.5 million losses incurred for the same period, last year. The revenue grew by 8 percent year-on-year to Rs.134.6 million.
The company has borrowings of Rs.232 million and Rs.71 million under overdrafts, bringing the total owned to banks to about Rs.300 million.
The total equity of the company as at June 30, 2018 was Rs.424 million, which came down from Rs.426 million as at March 2018.
The company has Rs.544 million in accumulated losses.
As the accumulated losses eat into the equity, the company on August 30 said it was “facing a situation of serious loss of capital,” and called for an Extraordinary General Meeting (EGM) to apprise the shareholders of the brewing situation.
Singhe Hospitals Chairman/CEO A.M. Weerasinghe holds 74.67 percent stake in the hospital while the high net worth investor, Dr. T. Senthilverl, has 11.11 percent stake in the company.
At the EGM held on September 13, the shareholders had agreed to issue shares by way of a private placement to infuse fresh capital into the company.
The private placement is subject to the approval of the Colombo Stock Exchange.
Singhe Hospitals, a Board of Investment-approved company began its operations in 2012.
The company decided to go public after just two years in operation to retire debt and invest in machinery and labs on the promise of turning a profit of Rs.10 million in the following financial year.