The Board of Directors of DFCC Bank at its meeting held on 29 September 2010 decided to issue fully paid-up bonus shares in the proportion of one new share for each issued ordinary share.
Consequent to the decision, the number of issued shares will increase from 132,427,718 shares to 264,855,436 shares. However, the total issued shares could further increase in the event of exercise of options by employees up to XC date. The number of unexercised options outstanding is 128,209.
The new shares will be issued at the par value of Rs. 10 per share. A sum of Rs.1,324,277,780 in the Share Premium Account will be capitalised, being the consideration for the proposed bonus shares, and will not result in a change to the stated capital equivalent.
The proposed distribution of new shares will be made under Section 7 of the Development Finance Corporation of Ceylon Act No.35 of 1955 (as amended) and Regulation No. 4 there under, which authorises the directors to issue the proposed new shares.
Based on the latest available information, the Board of Directors of the Bank has reasonable grounds to believe that the Bank will satisfy the Solvency Test immediately after the proposed capitalisation of part of the balance in the Share Premium Account. A certified copy of a resolution to this effect passed by the Directors has been submitted to the CSE. The Directors undertook to submit to the CSE a Certificate of Solvency from the Auditors.
In terms of Section 5.3 of the Listing Rules, the issue of shares credited as fully paid-up by way of capitalisation of funds in the Share Premium Account is subject to Colombo Stock Exchange approving in principle the issuing and listing of the shares.
The XC date will be announced once approval of the CSE is received.