Tuesday May 05, 2026
Tuesday May 05, 2026
Tuesday, 5 May 2026 00:22 - - {{hitsCtrl.values.hits}}
Merchant Bank of Sri Lanka & Finance PLC (MBSL) yesterday said its Board has proposed a Rs. 999.1 million Rights Issue aimed at strengthening its Tier I capital and meeting regulatory requirements.
MBSL said its Board resolved on 30 April to recommend raising capital through the issue of 99,912,312 non-redeemable, non-convertible, non-cumulative preference shares at Rs. 10 each.
The proposed shares will carry a variable non-cumulative dividend, subject to review every five years, based on the prevailing five-year Government securities yield plus a premium of 100 basis points, capped at Rs. 1.05 per share annually.
The Rights Issue will be offered to existing ordinary shareholders on the basis of four preference shares for every 21 ordinary shares held.
MBSL said the primary objective of the capital raise is to increase its Tier I capital to comply with Finance Companies Direction No. 3 of 2018 and to support future business expansion.
The move follows regulatory action by the Central Bank of Sri Lanka, which imposed certain restrictions on the company’s operations on 17 April due to non-compliance with minimum capital requirements as at 31 March 2026.
The company said the proposed capital infusion, together with the commitment of its parent, is expected to enable it to meet the required regulatory capital thresholds and facilitate the lifting of restrictions.
The Issue remains subject to approvals from the Colombo Stock Exchange, including a waiver under Listing Rule 5.1.1, as well as shareholder approval at an Extraordinary General Meeting.
