Agstar goes for Rs. 804 m Rights Issue

Tuesday, 9 November 2021 03:06 - - {{hitsCtrl.values.hits}}

Agstar PLC is going for a Rs. 804 million worth Rights Issue to settle outstanding working capital loans and fund fresh infusion.

The basis of the Rights Issue is one new voting share for every two voting shares held at Rs. 5 each and one new non-voting share for every two non-voting shares held at Rs. 4 each.

The company’s net assets per share was Rs. 11.10 as of 30 June 2021, up from Rs. 7.87 a year earlier. Yesterday, Agstar’s voting share closed at Rs. 8.80. It ended the June 2021 quarter at Rs. 7.20 with a high of Rs. 8.80 and a low of Rs. 7.20. The move will result in issuance of new voting shares of 153.76 million (raising Rs. 768.8 million) and 8.73 million of non-voting shares (Rs. 35 million).

As of 30 June 2021, Sierra Holdings owned a 31.7% voting stake in Agstar and LOLC owned 19.58%. Other major shareholders are Browns Investments 13.10% and Sierra Construction Ltd. 12%. Sierra Holdings also owns 66.66% of non-voting shares, whilst the other major shareholder is Agstar Managing Director A.P. Weerasekera (33.33% stake). Public float of Agstar voting shares is 18.8% held by 1,235 shareholders.

The current stated capital of Agstar is Rs. 1.2 billion. As of 30 June 2021, Agstar had Rs. 340 million in long-term loans and borrowings and Rs. 790 million on a short-term basis. Its retained earnings amounted to Rs. 2 billion.

In the FY21 first quarter, Agstar, which specialises in agri inputs, products and related services, saw revenue increase by Rs. 27% to Rs. 729 million, whilst pre-tax profit declined by 22% to Rs. 84.7 million.

Group revenue in FY21 grew by 108% to Rs. 3.6 billion and pre-tax profit (continuing operations) grew by 181% to Rs. 576 million. Net profit attributable to ordinary shareholders of the company rose by 245% to Rs. 476 million.

The Rights Issue is subject to approval being obtained from shareholders of the company at an Extraordinary General Meeting and approval in principle by the Colombo Stock Exchange for the issue and listing of shares.