EAP Broadcasting Company (EAP) may opt to go for a scaled-down debenture issue to partly finance its proposed theatre complex, a top company official said.
The company had announced its intention to issue a Rs.3 billion debenture in June to finance the project.
But the plans to raise funds got sidetracked when the Securities Exchange Commission (SEC) halted EAP’s debenture issue due to a case of conflict of interest in the issue’s rating.
The SEC said Lanka Rating Agency (LRA)—which assigned the issue a BBB rating—and EAP boards have common directors, which the SEC construed as a conflict of interest.
Further, the SEC said that LRA did not comply with the regulations and halted LRA from issuing further ratings, sending ripples down the line for companies—especially financial institutions—which had taken ratings in the past.
Mirror Business learns that EAP has found other avenues of funding in the ensuing period and a future debenture issue would be at a much smaller scale. ICRA Lanka, a wholly-owned subsidiary of ICRA Ltd, a group company of Moody’s Investors Service, recently gave EAP the same rating of BBB with a stable outlook.
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