JKH says no plan for rights issue

The country’s premier blue chip, John Keells Holding PLC (JKH) has refuted claims by the Board of Investment (BoI) Director General Dr. Lakshman Jayaweera and said the company had not made any decision to raise US $ 300 million through a rights issue.

“We write to inform you that the Board of Directors of John Keells Holding PLC has not made any decision with regard to a rights issue,” a stock exchange disclosure by the company said.

Last week the BoI chief said JKH would raise US $ 300 million through rights issued to foreign investors by The Waterfront Properties (Private) Limited, a subsidiary of JKH, to partly fund the US $ 850 million integrated resort at Glennie Street. He further said the funds would be raised before the end of this year.

It is uncertain whether BoI chief was confused between rights issue and a private placement. Nevertheless Dr. Jayaweera is yet to send a clarification.

Whatever the form, the conglomerate still remains tight lipped on how they are going to fund the project which could see cash outflows for the next 5 years which could even top US $ 1 billion due to the sheer magnitude of the project.

“As stated in our announcement dated 10 July 2013, the Board has only approved in principle subject to receiving all approvals to the satisfaction of the board,” JKH’s announcement read. Although JKH’s formal announcement came only last week, the plans to go for a similar project has been there for the past 2 years. However various practical issues put off the project. The fact that The Waterfront Properties (Private) Limited was incorporated in October 2011 partly proves this notion.