Cold Stores goes for Rs. 648 m Rights, 4 for 1 share subdivision

Tuesday, 10 May 2011 00:43 -     - {{hitsCtrl.values.hits}}

Ceylon Cold Stores will be raising Rs. 648 million via a Rights Issue followed by a four for one share subdivision.

The Rights Issue will be on the basis of one for 10 at Rs. 300 per share. The Cold Stores Board of Directors resolved that the issue price is fair and reasonable to all. John Keells Holdings owns 80.4% stake in Cold Stores.

The twin move was announced after the market was closed, but Cold Stores share yesterday rose by Rs. 9.10 to close at Rs. 799.90 on a volume of mere 100 shares. As per yesterday’s price the Rights is at an attractive discount.

Funds raised via Rights will be used to infuse equity into Jaykay Marketing Services Ltd. and to contribute towards expenditure plans of Cold Stores.

The current shares in issue are 21.6 million with stated capital at Rs. 270.2 million. Post rights, the number of shares will be 23.76 million. Following the four for one sub division, the number of shares will rise to 95.04 million.

Both moves are subject to shareholder approval.

In the first nine months of 2010/11 financial year, Cold Stores Group revenue rose by 15% to Rs. 12.3 billion. Profit before tax grew by 60% to Rs. 382.4 million, whilst the post tax figure was Rs. 161.4 million, up by 102% over the nine months of 2009/10 financial year.

As at 31 December 2010 revenues reserves at Company level amounted to Rs. 1.4 billion and total equity at Rs. 2.9 billion.