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Seylan Bank to proceed with Rs. 1 billion rights issue
Monday, 10 April 2006 - 12:17 PM SL Time
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Seylan Bank recently announced that it has received the approval from the Colombo Stock Exchange to proceed with its proposed Rights Issue of non-voting ordinary shares.
The necessary resolutions sanctioning the rights Issue will be placed before the shareholders at an extra-ordinary general meeting. The Bank will also be takeing steps to obtain the shareholder approval to amend its Articles of Association and bring it in line with CSE requirements. In the proposed rights Issue, the Bank will issue 83.56 million non-voting ordinary shares on the basis of 1:1 for both voting and non-voting ordinary shareholders.
The issue price is Rs. 12/50 per share (inclusive of a premium of Rs. 2/50 per share). The ex-rights date has been fixed for the 19th of April 2006 which means that the Bank`s shares (both voting and non-voting) will trade cum rights up to 18th April 2006. The rights Issue will be open from 2nd May to 24th May 2006. The last date for splitting will be 17th May 2006 whilst the last date for renunciation will be 24th May 2006. This issue will give present shareholders an opportunity to buy shares of the bank at an attractive price level of Rs.12/50 holding out opportunities for capital gains in the future.
The objective of the rights Issue is to raise Rs. 1 billion in Tier I capital which will improve the capital adequacy levels of the Bank; and also mobilize long term funds to match long term lending in future expansion programs.
Seylan Bank is expected to release its first quarter results with a considerably better performance over the same period in 2005, before May 2006.
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