Lankem to raise Rs. 677 m via 1 for 1 Rights

Tuesday, 8 December 2020 01:33 - - {{hitsCtrl.values.hits}}

Lankem Ceylon Plc is to raise Rs. 677 million via a Rights Issue to fund working capital requirements.

The Rights Issue will be on the basis of one new share for every share held at Rs. 20 each. The current stated capital of the company is Rs. 930.3 million with 33.85 million shares in issue.

The Lankem Board of Directors is of the view that the consideration for which the shares are to be issued is far and reasonable.

The Rights Issue is subject to shareholder and CSE approval.

Post announcement, the loss-making Lankem share price closed at Rs. 31.30, down by Rs. 2.60 or 7.6%. Net assets per share is Rs. 18.75 as at 30 September 2020 as against Rs. 19.70 as at 31 March 2020.

Lankem’s public shareholding is 14.75% held by 1,993 shareholders.

The Colombo Fort Land and Buildings Plc owns 44.31% and related party E.B. Creasy and Company owns 32.4%. Several other related parties also own minor stakes. Largest independent shareholder is Associated Electricals with 4.45% stake.

In the first half of FY21, Lankem Group revenue was almost unchanged at Rs. 7.76 billion whilst pre-tax loss was Rs. 485 million as against a loss of Rs. 632 million in the first half of FY20. Net loss attributable to equity holders of the parent was Rs. 417 million, down from Rs. 531 million. Retained loss at Group level was Rs. 1.8 billion as at 30 September 2020, up from Rs. 1.2 billion loss as at 31 March 2020.