First Capital’s Rs. 500 m debenture issue oversubscribed on opening day
Wednesday, 5 March 2014 00:24
The Rs. 500 million debenture issue of First Capital Holdings PLC (FCH) was oversubscribed on the opening day, 4 March, and was closed the same day, the company said in an announcement to the Colombo Stock Exchange.
The company offered five million, rated, senior, unsecured, redeemable debentures at an issue price of Rs. 100 each. The funds raised are to be utilised to retire existing short term borrowings thereby minimising liquidity and interest rate risk.
“We are greatly encouraged by the investor confidence implicit in the extremely positive response to our debenture issue,” said Dilshan Wirasekara, Deputy CEO of First Capital Holdings. “The success of this issue will provide a good platform for the company to build on its strong performance in the current financial year, in 2014-15.”
The debenture issue is attractively priced with three options available to prospective investors, with tenures of three, four and five years carrying annualised interest rates of 13.5%, 13.75% and 14% respectively.
The Colombo Stock Exchange (CSE) has approved in principle the application for listing the debt securities of First Capital Holdings PLC on the CSE. Both the issuer and the issue are rated BBB+ by RAM Ratings Lanka Ltd. with a stable outlook. The rating agency opined that the company ratings are supported by good capitalisation at its subsidiary First Capital Treasuries.
An entity listed on the Colombo Stock Exchange, First Capital Holdings PLC is the holding company of the First Capital Group which includes entities operating in debt and equity markets including First Capital Treasuries, a primary dealer licensed by the Central Bank of Sri Lanka, First Capital Asset Management, an investment manager licensed by the Securities and Exchange Commission of Sri Lanka which also manages a dedicated fixed income unit trust, First Capital Equities, a licensed stockbroker and member of the Colombo Stock Exchange, First Capital Markets, a licensed margin provider and First Capital Ltd., a structuring and placement agent for debt and equity, and provider of corporate finance and advisory services.
First Capital Holdings PLC recorded a turnover of Rs. 1.33 billion for the nine months ended 31 December 2013. This represents a growth of 15 per cent over the corresponding period of the previous year. The Group’s net trading income for the period under review was Rs. 398 million, an increase of Rs. 76 million over the same period in the previous year. The Group reported a consolidated profit after tax of Rs. 263 million which up 15% mainly due to higher gains on sale of trading securities partly offsetting higher administrative expenses.
First Capital Treasuries Ltd., the Group’s primary dealer arm, was the primary source of revenue, taking advantage of interest rate movements and exceeding targets. Other business segments like structuring and placement of corporate debt securities and investment management (corporate debt securities) also contributed to the results.