Ceylon Land & Equity to invest Rs. 1.7bn in Shaw Wallace & Hedges rights issue

Ceylon Land & Equity PLC has announced a strategic decision to invest approximately Rs. 1.7 billion to subscribe to the rights issue of Shaw Wallace & Hedges Limited, an unlisted company. 

The Board of Directors of Ceylon Land & Equity PLC resolved to take up its full entitlement in the issue, a move that significantly consolidates its holding in the unlisted entity, according to stock disclosure filed with the CSE last week.

The investment involves a subscription to two classes of shares. Ceylon Land & Equity will acquire over 86.3 million voting shares at a price of Rs. 17 per share, which amounts to a consideration of Rs. 1.47 billion. Additionally, the company will subscribe to 21.5 million non-voting shares at a price of Rs. 11 per share, totaling Rs. 236.5 million. 

The company stated that the investment will be funded through a combination of its own funds, temporary bank financing, and group borrowings.

Following this capital injection, Ceylon Land & Equity’s stake in Shaw Wallace & Hedges Limited will stand at 49.2 percent of the issued ordinary shares. This holding will comprise 43.6 percent of the voting shares and 100 percent of the non-voting shares of the unlisted company.