Kotagala Plantations to raise Rs.790mn via rights

Kotagala Plantations yesterday revealed plans to raise up to Rs.789.8 million via a rights issue.

The duo-crop (tea and rubber) company said it would issue 263.2 million new ordinary shares at Rs.3.00 each in the proportion of 07 news shares for every two existing ordinary shares held.

A stock exchange filing by the company said Rs.564.3 million of the rights proceeds will utilized to settle the funds already advanced by its major shareholders to support the working capital requirements of the company.

The balance Rs.225.5 million will be utilized to further support working capital needs of the company’s ongoing operations.

The rights issue is subject to shareholder approval. 

The stated capital of the company is Rs.781.5 million represented by 75.2 million ordinary shares and one Golden Share held by the Treasury. 

The company’s director board has resolved that, in their opinion, the consideration for which the shares are to be issued is fair and reasonable to the entity and existing shareholders.

Kotagala share was last traded at Rs.9.30. As at September 30, 2020, Kotagala Group’s net asset value was Rs.5.12. 

Over 65 percent of the issued shares of the company is owned by Lankem Group.