Sampath Bank PLC Friday sweetened its forthcoming rights issue of approx. 50.13 million new voting shares in the proportion of three new shares for every 13 already held shares at a price of Rs. 250 per share by announcing a scrip issue of approx. 13.55 million new shares in the proportion of one share for every 19.728 (approx) already held shares.
Following the scrip issue announcement on the CSE, the Sampath share closed at Rs. 327.40 on Friday, Rs. 9.40 up on the market, with 82,425 shares trading between a low of Rs. 319 and a high of Rs. 330.
This is the second capital call on Sampath shareholders since November last year and the bank has sent out notices summoning an Extraordinary General Meeting (EGM) on Mar. 7 to obtain shareholder approval for the rights issue.
The previous one for six rights issue was priced at Rs. 245 per share, at a sharp discount to then prevailing market price. Many investors who applied for additional shares were allotted up to 9,000 shares each enabling a windfall profit.
The availability of a fairly large number of additional shares was attributed by analysts to some large foreign shareholders not taking up their full entitlement and also not applying for additional shares to maintain their percentages.
At least one large shareholder who applied for a large number of additionals was disappointed by the 9,000-share limit on allotment of additional shares.
The bank has not indicated in its circular on what basis additional shares will be allotted to applicants but has made no underwriting arrangements with the directors saying "that the interest shown for the company’s share does not warrant an underwriting for the issue."
The company has also declared that it had "not sought any written commitment from any shareholder for subscription in full for their entitlement for the proposed rights issue and for their commitment to further subscribe to any unsubscribed shares."
"The company is confident that that the shareholders will subscribe in full for their entitlement for the proposed rights issue and there will be ample subscribers for the additional shares," the circular said.
It said the forthcoming rights issue is priced at a discount of Rs. 67.01 to the group’s net asset value per share. The Sampath share traded in Jan. at a high of Rs. 330 and a low of Rs. 313.60 closing at Rs. 318.20 with over 3.1 million shares transacted in 1,461 trades.
Following the scrip issue announcement on the CSE, the Sampath share closed at Rs. 327.40 on Friday, Rs. 9.40 up on the market, with 82,425 shares trading between a low of Rs. 319 and a high of Rs. 330.
This is the second capital call on Sampath shareholders since November last year and the bank has sent out notices summoning an Extraordinary General Meeting (EGM) on Mar. 7 to obtain shareholder approval for the rights issue.
The previous one for six rights issue was priced at Rs. 245 per share, at a sharp discount to then prevailing market price. Many investors who applied for additional shares were allotted up to 9,000 shares each enabling a windfall profit.
The availability of a fairly large number of additional shares was attributed by analysts to some large foreign shareholders not taking up their full entitlement and also not applying for additional shares to maintain their percentages.
At least one large shareholder who applied for a large number of additionals was disappointed by the 9,000-share limit on allotment of additional shares.
The bank has not indicated in its circular on what basis additional shares will be allotted to applicants but has made no underwriting arrangements with the directors saying "that the interest shown for the company’s share does not warrant an underwriting for the issue."
The company has also declared that it had "not sought any written commitment from any shareholder for subscription in full for their entitlement for the proposed rights issue and for their commitment to further subscribe to any unsubscribed shares."
"The company is confident that that the shareholders will subscribe in full for their entitlement for the proposed rights issue and there will be ample subscribers for the additional shares," the circular said.
It said the forthcoming rights issue is priced at a discount of Rs. 67.01 to the group’s net asset value per share. The Sampath share traded in Jan. at a high of Rs. 330 and a low of Rs. 313.60 closing at Rs. 318.20 with over 3.1 million shares transacted in 1,461 trades.
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