Shareholders reaffirm faith as NDB’s Rs. 8 b Rights snapped up

• Existing stakeholders take up 83% of Rights; bank to pursue private placement with Norway’s Norfund to complete new capital raising worth Rs. 9.5 b
• Chairman Eshana de Silva says successful Rights Issue showed investors’ confidence on prospects of country’s economy and the role NDB would play
• CEO Dimantha Seneviratne describes Rights and Private placement as very important milestone and vote of confidence on performance of bank by shareholders and international investors

NDB Director/Group CEO Dimantha Seneviratne

NDB Chairman Eshana De Silva

Shareholders of NDB have reaffirmed their faith in NDB, with its Rights Issue snapped up and the bank slated to successfully complete the fresh capital raising worth Rs. 9.5 billion. 

The success is significant in the midst of the third wave of the COVID-19 pandemic, with the capital raising exercise aimed at supporting the growth momentum of NDB. The 28 for every 61 held Rights Issue entailed 106.78 million shares at Rs. 75 each.

NDB said yesterday existing shareholders and new shareholders alike showed keen interest in the issue with over 61 million rights changing hands prior to the last rights acceptance date. The requests for additional rights shares totalled almost 10% of the amount on offer, which is also a significant development. 

Norfund (a Norwegian Development Finance Institution which is a leading development finance institution in the global sphere), had shown interest in taking up a 9.99% stake in the company and this was duly approved by the shareholders via an EGM prior to the Rights Issue. 

With the current shareholders taking up 83% of the shares on offer, it means that the Norfund requirement cannot be accommodated with the unsubscribed shares. 

Accordingly, the Board of Directors, pursuant to the agreements with Norfund and shareholder approval in place, has decided to offer private placement shares to Norfund at Rs. 82.50 per share, a 10% premium on the rights price and the current market price.

 This will enable Norfund holding reach 9.99% shares in the bank post the Rights Issue and private placement (35.67 million shares). Norfund got 17.9 million shares via Rights and balance 17.7 million via private placement.

In total, the bank is expected to add Rs. 9.5 billion in Tier I capital.

NDB Bank PLC Chairman Eshana De Silva said this successful Rights Issue showed investors’ confidence on the prospects of the country’s economy and the role NDB would play. “We also look forward to welcoming Norfund as a shareholder,” he added.

Director and Group CEO Dimantha Seneviratne said that the successful Rights Issue and the expected private placement was a very important milestone for the bank. 

“This is a resounding vote of confidence on the performance of the bank by the shareholders and international investors. The bank is now well placed to implement its growth plans at speed. I would like to thank our longstanding shareholders who continue to have faith in the management and the potential the bank has. I note some new shareholders, who have taken a significant stake in the bank; whilst welcoming them, I appreciate their confidence in the bank and assure them that they have made a good decision. I also look forward to welcoming Norfund to the bank, and to the value they will bring to the bank,” Seneviratne added.

NDB was crowned as Sri Lanka’s Best Bank 2021 by the prestigious US magazine Global Finance, fresh on the heels of being recognised as The Bank of the Year Sri Lanka by The Banker Magazine UK. NDB Bank is the fourth largest listed bank in Sri Lanka and the parent company of the NDB Group. 

The only financial services conglomerate in Sri Lanka, NDB Group is uniquely positioned towards assisting the growth and development of the Sri Lankan capital market to provide its customers seamless access to the product and service offerings of all its group companies.