The biggest ever private placement worth Rs. 4.9 billion by Vallibel One Ltd., (VOL) has drawn applications worth Rs. 7.5 billion, a senior official of the Company told the Daily FT last night.
They said that following unprecedented demand and contrary to an announcement made at a reception on Sunday night, the Company will opt for a pro-rated basis when allocating shares.
VOL via a private placement was issuing 196 million shares at Rs. 25 each. It was slated to open today and kept open till Friday but early bookings and rush of applications saw its formal closure by yesterday.
“We had received applications worth Rs. 7.5 billion reflecting an oversubscription of Rs. 2.6 billion,” VOL Executive Deputy Chairman Nimal Perera said.
According to him there had been several big applications including two each requesting for Rs. 500 million worth of shares. Among those who applied were US and Southeast Asian investors whilst investor profile ranged from high networth individuals to institutions.
“For those who applied between the minimum of Rs. 2.5 million and Rs. 25 million we have decided to allot in full whilst those who had applied for shares worth between Rs. 26 and Rs. 99 million will get a prorate allotment. Furthermore those who had applied Rs. 100 million and above will get an allotment of Rs. 100 million worth of shares,” Nimal added.
“The basis of allotment is to accommodate as many as possible,” he said adding that the company was sticking to the original value of Rs. 4.9 billion in spite of the heavy demand.
Having successfully concluded the private placement, VOL is planning its IPO (offering around 21.3 million shares) at the same price of Rs. 25 per share in March. Post private placement and IPO, public holding in VOL will be 20% with Chairman and Managing Director Dhammika Perera holding 80% stake.
VOL is a diversified holding company with strategic investments in financial services, tile and sanitary ware manufacturing, and leisure. Sector specific operations are carried out through its subsidiaries, namely LB Finance Plc, Royal Ceramics Lanka Plc and Greener Waters Ltd., the leisure venture arm of the company. Further, the company holds 15% of Sampath Bank Plc, which is treated as a strategic long term investment. The stakes in listed entities were previously held by Dhammika under his personal name.
Funds raised via the private placement will be used for financing of its leisure venture as well as renewable energy projects. In the leisure sector the Company via the subsidiary Green Waters Ltd is investing in a 382 room, luxurious five star resort, in Kochichikade, Negombo. The company has already invested in the 14 acre land at a cost of Rs. 268.06 million. As at 31 December, 2010, VOL’s assets amounted to Rs. 21.7 billion.