RIL Prop­erty an­nounces Rs.800mn rights is­sue to set­tle bank bor­row­ings

Daily Mirror (Sri Lanka) - - SPORTS -

RIL Prop­erty PLC this week an­nounced plans to is­sue fresh shares to its ex­ist­ing share­hold­ers to raise money in a bid to set­tle part of its bank bor­row­ings that weigh on group prof­its.

In a stock ex­change fil­ing, the prop­erty de­vel­oper, which has in­ter­ests in food and au­to­mo­biles, said it will is­sue 200 mil­lion or­di­nary vot­ing shares in the pro­por­tion of one new or­di­nary share for every three shares held at an is­sue price of Rs.8.00.

At Mon­day’s mar­ket close, RIL Prop­erty’s share ended 60 cents higher at Rs.7.80. This makes the right is­sue price higher than the trad­ing price of the stock.

The­o­ret­i­cally, for a right is­sue to be­come at­trac­tive the is­sue price must be lower than the cur­rent trad­ing price of the stock but in RIL Prop­erty’s case, since the ma­jor­ity stake is held by a fam­ily, this no­tion is less rel­e­vant.

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