Ceylon Hotels Corp. to reduce stated capital to write off Rs. 1 b loss

Ceylon Hotels Corporation Plc’s Board has decided to reduce the stated capital of company to write off Rs. 1.02 billion of carried forward losses.

In a filing to the Colombo Stock Exchange, the Hotels Corp. said as at 31 March 2016, the carried forward loss was Rs. 1.022 billion which has adversely affected the company’s ability to pay dividend to shareholders. Furthermore in terms of the Company’s Act, the solvency test requirements have to be satisfied prior to any dividend distribution in the future. 

In view of this, the directors have proposed the stated capital reduction to wipe off the carry forward losses.

Accordingly the stated capital of the company will be reduced from Rs. 1.22 billion represented by 171.825 million shares to Rs. 198.5 million consisting of 171.825 million shares.

Hotels Corp. will convene an EGM on 26 September to get shareholder approval for this move.

In financial year ended on 31 March 2016, the Group after tax profit was Rs. 123.7 million, up from Rs. 86 million a year earlier. Net profit attributable to equity holders of the parent was Rs. 67 million, up from Rs. 50 million in FY15. 

The fourth quarter bottom line was Rs. 149 million, up from Rs. 111 million and Group after tax profit was Rs. 198 million as against Rs. 118 million in the fourth quarter of the previous financial year.

Sanjeev Gardiner-controlled Ceylon Hotels Holdings owns a 54.5% stake in Hotels Corp and EPF holds 12% and Rosewood Ltd. owns 10%.