Brac Lanka Finance to raise capital with Rs1.32bn rights issue

Dec 23, 2016 (LBO) – Sri Lanka’s finance firm, Brac Lanka Finance is to raise 1.32 billion rupees by way of a rights issue, the company said in a stock exchange filing. Following Central Bank approval, the Directors of Brac Lanka resolved by circular resolution dated 21 December 2016 to increase the capital by way of a rights issue. Subject to the necessary approvals, the company is to issue 132,190,708 shares at 10 rupees each in the ratio of five new shares for every four shares held. The proceeds will be utilized to ensure compliance by the Company with the minimum capital requirement as required by the Finance Companies (Risk Weighted Capital Adequacy Ratio) Direction No. 02 of 2006, the company said. The current stated capital of the Company is 171,180,454 rupees represented by 105,752,566 ordinary shares. If the rights issue is fully subscribed the stated capital will increase by a further 1,321,907,080 rupees thereby increasing the stated capital to 1,493,087,534 rupees and the number of shares from 105,752,566 to 237,943,274. Sri Lanka’s securities watchdog, the Securities & Exchange Commission last week instructed the Colombo Stock Exchange to lift the trading ban imposed on Brac Lanka Finance. The SEC earlier imposed a trading suspension on Brac Lanka Finance under section 246 of the Companies Act. The securities regulator thereafter specified a procedure to provide dissenting shareholders with an opportunity to retain their shares in the company and to continue as shareholders thereof. The CSE said in a stock exchange notification last week that the SEC has informed them that the specified procedure has been duly followed by the company.