Rocell to capitalise Rs. 554 m reserves

Friday, 26 November 2010 02:44 - - {{hitsCtrl.values.hits}}

Boosting its share price the board of Royal Ceramics Plc yesterday resolved to capitalise reserves to the value of Rs. 554 million by way of an issue of new shares.

The basis of capitalisation will be one new share for every one held thereby issuing 55.394 million shares at Rs. 10 each. The current stated capital of RCL is Rs. 814.7 million which is part of its Rs. 2.36 billion equity.

As at 30 September, it had retained earnings of Rs. 1.18 billion and reserves worth Rs. 366 million.

The value of reserves to be capitalised would be on the basis of Rs. 350.4 million from revaluation reserve and Rs. 203.5 million from revenue reserve.

RCL said the move subject to regulatory and shareholder approval would satisfy the solvency test immediately after the capitalisation is made.

The announcement boosted the share price of RCL to high of Rs. 319 before closing at Rs. 310.90, up by Rs.15.90 or 5% from Wednesday. Deals on RCL created the second highest turnover of Rs. 214.5 million.

RCL in the first half of 2010/11 financial year achieved a net profit of Rs. 606.5 million, up by 114% compared with the corresponding period of the previous year.