Nahil to raise Rs. 1b via Rights at East West

Wednesday, 5 January 2011 00:16 - - {{hitsCtrl.values.hits}}

Business tycoon Nahil Wijayasuriya controlled East West Properties Plc is to raise Rs. 1.03 billion via a Rights Issue for working capital and tap new opportunities in the post-war demand for leisure sector.

The Company’s Board of Directors has resolved to go for three for one Rights Issue at Rs. 10 each subject to shareholder approval.

The proposed move will issue 103.68 million shares and raise Rs. 1.03 billion. The current stated capital of East West Properties is Rs. 175.2 million.

“The purpose of the Rights is to provide working capital for on-going funding of projects and build a land bank of properties suited for the hospitality and leisure industry,” East West said.

The Company’s share was trading between a high of Rs. 13.30 and a low of Rs. 12.80 before closing at Rs. 13.20, up by 20 cents. In 2010 its highest share price was Rs. 18 and the lowest was Rs. 7.75 and closed at Rs. 12.90.

East West’s biggest shareholder is Asia 2000 Investments which owns 51% stake whilst there are around 1,500 shareholders and a public holding of 37%.

In the six month ended on 30 September, 2010, East West’s revenue rose by 67% to Rs. 5.7 million whilst after tax profit was Rs. 31.76 million in comparison to Rs. 4.4 million in the corresponding period of 2009/10.

Its property, plant and equipment are valued at Rs. 128 million whilst its total assets were Rs. 487 million as at 30 September, 2010. Retained earnings were Rs. 261 million.

During 2009/10 financial year the Company recorded a turnover of Rs. 8.7 million being the income from the two warehouses No. 1 and No. 2 at Peliyagoda. These warehouses were tenanted throughout during the financial year. The Net profit amounted to Rs. 52 million, up from Rs. 1.1 million in the previous year. The increase due to Rs. 56 million earned as capital gains from the sale of 18.85 million shares of Hotel Services for Rs. 387.1 million.