Ceylon Land & Equity to raise Rs.4.3bn via rights issue

Ceylon Land & Equity PLC disclosed that its board approved a rights issue to raise about Rs.4.3 billion, as the property and investment firm looks to pare short-term debt and fund new investments.

The company, in a disclosure to the Colombo Stock Exchange (CSE), said its board resolved on January 31 to issue 614.16 million ordinary voting shares, at Rs.7 each, on the basis of two new shares for every one existing share held, subject to shareholder approval.

The board said it considered the issue price to be fair and reasonable to the company and its existing shareholders.

The proceeds from the rights issue will be used to settle short-term bank loans and inter-company borrowings, while also funding investments in property development and portfolio management, the company said.

Ceylon Land & Equity’s stated capital stands at Rs.2.07 billion. The rights issue is subject to obtaining the in-principle approval from the CSE for the issue and listing of the shares as well as the approval from the shareholders at an Extraordinary General Meeting.

If approved, the fundraising is expected to strengthen the company’s balance sheet while providing headroom for expansion into property and financial investments, at a time when the firms are seeking to rebalance leverage amid still-tight financing conditions.