Brac Lanka Finance to raise Rs.1.3bn via rights issue

The LOLC group’s Brac Lanka Finance PLC (NIFL) yesterday announced its plans to raise Rs.1.32 billion through a rights issue of shares, continuing the recent trend witnessed recently with the financial sector scrambling to raise finances to improve capital buffers in the midst of high 
credit growth.

In a filing to the Colombo Stock Exchange (CSE), NIFL said that its director board has obtained the Central Bank approval to issue five new shares for every four existing shares, for a total of 132.19 million shares, at a consideration of Rs.10 per share.

The company’s current stated capital is Rs.171.18 million, which would be increased to Rs.1.49 billion following the rights issue.

“The proceeds of the issue are to be utilized to ensure compliance by the company with the minimum capital requirement,” NIFL said.

The issue is subject to approval from the CSE and NIFL’s shareholders.

The LOLC group subsidiary Commercial Leasing & Finance PLC is the sole shareholder of NIFL, after it acquired all the shares through a mandatory offer in 2014.

However, the acquisition of shares requires finalization, NIFL’s latest financial statements said.

Prior to the mandatory offer, Commercial Leasing & Finance owned 94.35 percent of the shares of NIFL.

NIFL requires at least 10 percent of its shares to be classified as public float, spread amongst 200 shareholders or 7.5 percent of the shares, represented by one billion in public float market capitalization, spread amongst 200 shareholders, to remain listed on the CSE by June 30, 2017.