The Board of Directors of Harischandra Mills Plc has resolved to capitalisation of Rs. 96 million of its reserves.
The decision to recommend a distribution from retained earnings to shareholders by the issue of new shares in the Company credited as fully paid up by way of capitalisation of Rs. 95.98 million, was made at its meeting on 8 January.
The number of shares to be issued is 959,800 in the proportion of one new share for every one held at Rs. 100 per share. The share traded at a low of Rs. 2,349 and a high of Rs. 2,620 before closing at Rs. 2,469, up by Rs. 120.
In the September quarter the share closed at Rs. 2,300. For the six months ended on 30 September 2015 earnings per share was Rs. 101.73, marginally down from Rs. 102.62 a year earlier. In FY15, it was Rs. 204.40. The current stated capital of the company is Rs. 9.598 million.
The move is subject to regulatory and shareholder approval.
The Company said it is able to satisfy the solvency test immediately after capitalisation of reserves.
Dr. T Senthilverl is the biggest shareholder of Harischandra Mills with a 25% stake. The Company has 437 public shareholders holding 43%.