Kotagala Plantations to raise Rs. 790 m via Rights Issue

Kotagala Plantations PLC has announced plans to raise Rs. 790 million via a Rights Issue.

The issue will be on the basis of seven new shares for two held at Rs. 3 per share and will involve the issuance of 263.28 million shares (Rs. 789.8 million).

The stated capital of the Company is Rs. 781.5 million. 

A part of the proceeds from the Rights Issue will be utilised to settle funds amounting to Rs. 564.3 million already advanced by the major shareholders to support the working capital requirements of the Company. The balance funds amounting to Rs. 225.5 million raised will be utilised to further support the working capital needs of the ongoing operations of the company.

The Rights Issue is subject to shareholder and CSE approval.

Kotagala Board of Directors have resolved that in their opinion the consideration for which the shares are to be issued is “fair and reasonable” to the entity and all existing shareholders.

The Kotagala share price yesterday closed at Rs. 9, down by 30 cents. The net assets per share as at 30 September 2020 was Rs. 4.70, down from Rs. 9.50 a year earlier. In the September quarter, the highest price of Kotagala share was Rs. 9, while the lowest was Rs. 5.30, and closed at Rs. 8.40. Consolidated Tea Plantations Ltd. owns 42% and related party Lankem Tea and Rubber Plantations owns 23.7%.

The percentage of shares held by the public as at 30 September 2020 was 25.67% and the number of public shareholders is 12,818.