Hemas Holdings PLC (HHL) has summoned an extraordinary meeting on April 10 to obtain shareholder approval for a rights issue of approx. 57.25 million new shares at Rs. 72 per share which the directors consider "fair and reasonable" to the company and all existing shareholders.
The rights issue seeks to infuse approx. Rs. 4.12 billion zero cost equity capital into the company to fund strategic investment opportunities in the health care and fast moving consumer goods (FMCG) segments of the group, a circular to shareholders said.
"The directors believe that the funds to be committed would bring in significant long term returns to the group and further establish HHL’s leading position in these sectors," the circular said.
The major shareholders of the company, comprising members of the Esufally family have informed the board that they have received "strong expressions of interest" from reputed international institutional and domestic investors that they would like to become shareholders of the company or increase their existing shareholdings.
"In order to accommodate this demand, the major shareholders of HHL have decided not to subscribe for their rights in order to enable the aforesaid parties to become shareholders or increase their shareholding," the circular said.
The effect of this non-subscription would result in the major shareholders’ stake in the company will reduce from 71.26% to 64.14%, it said, disclosing that the major shareholders will divest their rights on the trading floor of the CSE.
The circular set out the closing price of the HHL share as well as its highs and lows as at Dec. 14 (2014) and Jan. and Feb. 15, 2015, indicating that the Rs. 72 rights issue price is a discount to the market price.
HHL closed yesterday at Rs. 75 on the CSE.
