Options to subscribe to JKH additional warrants left out

The options to subscribe to additional warrants in the John Keells Holdings PLC (JKH) 2015 and 2016 warrant issues were left out of the prospectus for good governance practices, the country’s largest conglomerate said.

The issue precludes warrant holders to acquire allotted warrants left unsubscribed by their fellow warrant holders, and from subscribing to additional warrants above the total in the entire issue. “This is for governance and transparency. If someone don’t subscribe to all his warrants, and tells another person that such warrants are available for purchase, it becomes a sort of a private placement. We wanted to avoid that,” JKH Deputy Chairman Ajit Gunewardene said.
He noted that this was an initiative undertaken by the company without regulatory enforcement.
The JKH 2015 warrants are currently in the conversion period, with the warrants set to expire on November 12.
While JKH Group’s Nation’s Trust Bank had announced in 2011 that it would allow for 12 million additional subscriptions on top of the 41.93 million warrants allocated, subsequent financial statements show that the shares in NTB increased by just 20.96 million shares, creating a precedence.
“It was blocked,” Gunewardene added.
The JKH warrants were part of the fund raising activities for the US$850 million flagship Cinnamon Life project. The 2015 and 2016 warrants are worth US$128.6 million in total, which were issued with a 177.7 million rights subscription as well.
The rest of the Cinnamon Life project is funded through a US$395 syndicated loan and internal funding. (CW)