The Shareholders of the Seylan Bank PLC at an Extraordinary General Meeting(EGM) held yesterday unanimously approved the proposed private placement of shares and public issue of share at Rs. 35/- per share.
The shareholders also adopted the new Articles of Association in conformity to the Company s Act of 2007.
During the last four months the Bank gained additional deposits of Rs. 4 Bn while its ordinary voting share traded at a high of Rs. 47/- per share in 2009.
Through the Private Placement, a total of 32,150,000 ordinary voting shares will be issued of which 13 Mn shares (10%) will be taken up by Bank of Ceylon and 19.15 Mn shares will be taken up by Sri Lanka Insurance Corporation. Their collective stake in the Bank would amount to 25% of the increased capital of the Bank.
Through the Public Share Issue, a total of 54.3 million ordinary voting shares will be offered to the public which includes both local and foreign investors. Existing shareholders are also eligible to apply and will be entitled to a preferential allotment upon application, on the basis of one share for every two shares they hold as at end of trading on 2nd September 2009.
The unanimous adoption of both special resolutions by the shareholders sanctioning the private placement and the public issue at a price of Rs. 35/- per share, bears ample testimony to the trust and confidence placed by the shareholders in the Board of Directors and management of Seylan Bank.
A Bank spokesperson said that the new capital to be raised will have a significant effect on the smooth running of the bank and will enable the Bank to enhance its advances portfolio by making well-evaluated advances. Such lending on a strictly monitored basis will increase the bank s revenue.
The funds raised will also enable the bank to expand its branch network, particularly in the now accessible north and East of the country. The funds will also enable the Bank to minimize the Bank s long term interest rate risks and achieve acceptable interest rate gap exposure. It will also enable the bank to enter the long term housing sector.
The Bank s ordinary voting shares have traded at a high of Rs. 47/- per share in 2009. The net asset value per share (including non voting shares) currently stands at Rs. 42/-.
The Shareholders also unanimously approved the adoption of new Articles of Association for the Bank at the EGM. Incidentally Seylan Bank is the first commercial bank to have adopted the new Articles of Association in conformity with the Companies Act No. 7 of 2007.