John Keells Holdings PLC (JKH) yesterday announced its Board has resolved to terminate the Global Depositary Receipts (GDR Program), owing to the relatively low number in issue and given that they are not a significant contributor to facilitating trading in Company securities.
JKH said the termination would not have an impact on the Company with GDR holders having the option to convert to ordinary shares in the Company. Following the termination, the GDR will be delisted from the Luxembourg Stock Exchange.
In 1994 JKH raised US$ 35 million by issuing Global Depositary Receipts (GDR) from overseas investors. It was a first by a Sri Lankan corporate.
The termination has been effected in terms of Section 6.02 of the Regulation S Deposit Agreement and Rule 144A Deposit Agreement, each dated as of 14 March 1994, executed by and among John Keells Holdings PLC (previously John Keells Holdings Limited), Citibank, N.A., as Depositary, and the holders and beneficial owners of Global Depositary Shares issued thereunder (each deposit agreement individually and collectively, the “Deposit Agreement”) and the Company has on 7 November 2023 notified the Depositary in this regard.
GDR holders will be able to cancel their GDR’s up to six (6) months after their termination date (until 14 June 2024). GDR holders are requested to arrange for the surrender of their Global Depositary Shares (GDS) or GDRs evidencing such GDSs to the Depository for cancellation by 14 June 2024.
The Depositary will, after the Program Termination Date, continue to distribute dividends and the net cash proceeds from the sale of corporate actions entitlements (after deduction of applicable fees, taxes and expenses) to holders of GDSs (or GDRs evidencing such GDSs) who surrender their GDSs (or GDRs evidencing such GDSs) for cancellation after the record date for the applicable dividend or corporate actions entitlement but before 14 June 2024.
To receive such dividends or net cash proceeds from the sale of corporate actions entitlements with respect to GDSs (or GDRs evidencing such GDSs) cancelled before 14 June 2024.
Holders have the option of converting their GDS’s to Shares based on the Share to GDR Ratio and may do so by notifying the Depository in this regard.
Holders who surrender their GDSs (or GDRs evidencing such GDSs) for cancellation will be able to take possession of the corresponding Shares in book-entry form only and, as a result, they must have, or establish, a custodian or brokerage account in Sri Lanka, in accordance with the laws of Sri Lanka, to receive such Shares prior to surrendering their GDSs to the Depositary for cancellation. If the Depositary cannot complete the delivery of the Shares to the specified account in Sri Lanka within 3 days from 14 June 2024, the holders will instead be entitled to receive the cash proceeds of the sale of the Shares, net of any taxes, fees and commissions, at a date to be determined.
Pursuant to Section 6.02 of the Deposit Agreement, all holders of GDSs (or GDRs evidencing such GDSs), upon surrender of their GDSs (or GDRs evidencing such GDSs) to the Depositary, are entitled to delivery of the corresponding Deposited Securities represented by the GDSs (or the GDR(s) evidencing such GDSs) upon the terms and subject to the conditions of the Deposit Agreement (net of any applicable fees, taxes and charges set forth in the Deposit Agreement).
At any time after the expiration of six (6) months from the Program Termination Date, the Depositary may sell the Deposited Securities representing GDSs (or GDRs evidencing such GDSs) which have not been surrendered for cancellation prior to such expiration and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it under the terms of the Deposit Agreement, in an unsegregated account, without liability for interest, for the pro rata benefit of the holders of GDSs (or GDRs evidencing such GDSs) whose GDSs have not been surrendered for cancellation prior to the expiration of six (6) months from the Program Termination Date.
After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement with respect to the GDRs, GDSs and Deposited Securities, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of the Depositary for the surrender of GDSs (or GDRs evidencing such GDSs), any expenses for the account of the holder(s) pursuant to and in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental charges or assessments, in each case in accordance with the terms of the Deposit Agreement).