Sampath Bank talking to investors to allot unsubscribed Rights

Sampath Bank is talking to potential investors to place the unsubscribed component of its Rs. 12.1 billion Rights Issue.

The Rights Issue involved 89 million shares on the basis of seven new shares for 23 existing shares at Rs. 136 each.

Sampath Bank said the number of shares allotted to shareholders and to be listed pursuant to the Rights Issue is 63.538 million shares, suggesting that 25.46 million shares worth Rs. 3.4 billion remain unsubscribed. 

“The Board of Directors are discussing with a potential investor to place the balance undersubscribed shares of Rights Issue and will make a further disclosure regarding the process,” the Bank said in a filing to the CSE.

“Such allocations will be made after allocating Rights to shareholders who applied for entitled and additional shares in full satisfaction of their request and at the same price (Rs. 136) per share,” it added.

The Bank also said that it has not been able to allot the full entitlement of shares that certain large shareholders would have been entitled to under the Rights Issue, since the thresholds mandated by the Banking Act would have been exceeded by such full allocation, purely because of the under-subscription. The Board of Directors has therefore decided to inform such shareholders in writing that the Bank will retain the subscription funds sent with their application for Rights Shares, and if the Rights issue is not fully subscribed within a reasonable time frame, the Bank will refund the excess funds due to such shareholders, in accordance with the provisions of the CSE.

Funds raised from the Rights Issue will be utilised to improve Common Equity Tier 1 capital of the Bank under the Basel III regulations. Between January and March 2019 Sampath Bank shares traded between a high of Rs. 245 and 224 and the lowest ranged between Rs. 217.30 and Rs. 174.50. It closed March at Rs. 174.50, down from Rs. 239.10 by end January. On Friday the share closed at Rs. 138.50.