Old established Brown and Co. PLC has summoned an extraordinary general meeting (EGM) of shareholders on Tuesday (July 17) to seek their approval for a rights issue of 141.75 million ordinary shares of the company, in the proportion two new shares for every share already held priced at Rs. 50 a share.
A circular to shareholders indicated that funds to be raised by the rights issue, to be underwritten without charge by Lanka Orix Leasing Company PLC (LOLC), is intended to settle outstanding borrowings of Rs. 7.087 billion (approx) of a total of approx. 7.094 billion due as at June 1, 2018.
A substantial component of the company’s borrowings as at May 31 is due to related parties with approx. Rs. 6.66 billion due to related parties while approx Rs. 10.03 billion is due to other parties.
Although the Brown’s share traded at highs ranging from Rs. 74.50 to Rs. 73.20 and lows of Rs. 68.50 to Rs. 55.50 in March, April and May, the current downturn in the Colombo Stock Exchange has driven the share below the fifty-rupee rights issue price.
The share closed on Friday at Rs. 48.50 with a small quantity of 672 shares trading between this price and Rs. 50, and closing at Rs. 48.50.
The shareholder circular said that LOLC is currently the ultimate holder of 54% of Browns shares through various related companies while owning 4.77% in its own account. It further said that if, resulting from the underwriting, LOLC were to hold above 30% of Browns, the mandatory offer provisions of the Company’s Takeovers and Mergers Code will not apply to LOLC.
Browns plan to dispatch provisional letters of allotment on July 24 upon receiving shareholder approval for the rights issue at the EGM.
Browns have paid no dividend for 2017/18, a dividend of 50 cents per share the previous year and 30 cents per share a year earlier. In 2014/15 it paid a dividend of Rs. 2.65 a share according to figures furnished in the rights issue circular.
A circular to shareholders indicated that funds to be raised by the rights issue, to be underwritten without charge by Lanka Orix Leasing Company PLC (LOLC), is intended to settle outstanding borrowings of Rs. 7.087 billion (approx) of a total of approx. 7.094 billion due as at June 1, 2018.
A substantial component of the company’s borrowings as at May 31 is due to related parties with approx. Rs. 6.66 billion due to related parties while approx Rs. 10.03 billion is due to other parties.
Although the Brown’s share traded at highs ranging from Rs. 74.50 to Rs. 73.20 and lows of Rs. 68.50 to Rs. 55.50 in March, April and May, the current downturn in the Colombo Stock Exchange has driven the share below the fifty-rupee rights issue price.
The share closed on Friday at Rs. 48.50 with a small quantity of 672 shares trading between this price and Rs. 50, and closing at Rs. 48.50.
The shareholder circular said that LOLC is currently the ultimate holder of 54% of Browns shares through various related companies while owning 4.77% in its own account. It further said that if, resulting from the underwriting, LOLC were to hold above 30% of Browns, the mandatory offer provisions of the Company’s Takeovers and Mergers Code will not apply to LOLC.
Browns plan to dispatch provisional letters of allotment on July 24 upon receiving shareholder approval for the rights issue at the EGM.
Browns have paid no dividend for 2017/18, a dividend of 50 cents per share the previous year and 30 cents per share a year earlier. In 2014/15 it paid a dividend of Rs. 2.65 a share according to figures furnished in the rights issue circular.
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