Hayleys MGT goes for yet another Rights Issue to raise Rs. 526 m

Friday, 13 June 2014 02:02 -     - {{hitsCtrl.values.hits}}

Hayleys MGT Knitting Mills (MGT) has announced a second Rights Issue in two years to further improve the Company’s financial health. MGT’s Board of Directors has resolved to issue 55.4 million ordinary shares by way of a 4 for 11 Rights Issue at Rs. 9.50 per share. This, subject to shareholder and regulatory approval, will raise Rs. 526 million. The Company said funds will be utilized to strengthen the Company’s financial position by retiring debt. MGT as at 31 March 2014 had Rs. 1.98 billion in interest bearing short term loans, up from Rs. 1.58 billion a year earlier. MGT share traded at Rs. 13.30 on Wednesday. Its highest traded price in the March 2014 quarter was Rs. 12.90. Net asset per share is Rs. 9.27. In mid-2012, MGT raised Rs. 914 million via a 2 for one Rights at Rs. 9 per share to use Rs. 850 million to strengthen the Balance Sheet. Balance funds were to be used for an ERP system and energy saving initiatives. Hayleys Plc holds 78.5% whilst among other shareholders are EPF (2.67%), and MAS Holdings (2%). Retained loss was Rs. 1.2 billion as the Company was impacted by a fraud in 2010/11 financial year. The Company suffered a Rs. 873 million loss in FY12 and Rs. 799 million loss in FY11. In FY14, net loss was Rs. 183 million, down from Rs. 479 million in the previous year. Revenue grew by 39% to Rs. 8 billion in FY14.