Sri Lanka Softlogic Holdings announces dates for rights issue
ECONOMYNEXT – Sri Lanka’s Softlogic Holdings on Friday announced dates for its much-anticipated rights issue to raise 3.9 billion rupees to retire short term debt, its share price rising nearly 96 percent since end-December 2017.
Softlogic Holdings said provisional allotment of the rights issue will be made on 26 March 2018 after the extraordinary general meeting scheduled for that day.
Rights shares will commence trading on 9 April with the last date for payments set for 18 April.
The rights issue will create 24 new shares for every 100 which will amount to nearly 231 million new ordinary shares priced at 17 rupees.
Softlogic Holdings was trading 60 cents lower at 24.40 rupees mid Friday, up 95 percent since end December.
Softlogic was primarily an IT services company when it listed on the Colombo Stock Exchange six years ago, debuting at Rs29 a share.
A debt-funded diversification strategy including in fashion retail chain Odel, Asiri Hospital Holdings and Softlogic Life Insurance, led to a credit rating downgrade and the share price gradually losing more than half its value to Rs12.50 by end-December 2017.
However, the share has seen a turnaround after the group announced the private placement and rights issue mid-January 2018.
During the first two months of 2018, the share has gaining 104% to Rs25.50 by end-February. During this period, the Benchmark All Share Index grew under three percent.
Net foreign inflows into Softlogic amounted to Rs2 billion over January-February 2018, that’s a third of net inflows to the entire market during this period.
The proceeds of the rights issue will be utilized to retire short term debt.
Softlogic Holdings’ total debt portfolio is worth 21.8 billion rupees, with short term borrowings amounting to 12.5 billion rupees.
The rights issue follows a private placement of nearly 183 million ordinary shares at 17 rupees each to Samena Ceylon Holdings, a company incorporated in the Mauritius and subsidiary of Samena Capital.
Samena Capital is a Dubai-based fund manager with $1 billion under management across the Indian subcontinent, Asia, the Middle East and North Africa (Samena region), has agreed to invest $35 million in Softlogic’s proposed private placement.
The private placement will raise 3.1 billion rupees.
The private placement and rights issue proceeds will more than halve Softlogic Holdings’ short term debt liabilities to 5.5 billion rupees. (COLOMBO, March 16, 2018)