Sri Lanka’s Bank of Ceylon property unit to go off stock exchange
ECONOMYNEXT – Property Development Ltd, a 95 percent owned subsidiary of state-run Bank of Ceylon with 3,385 minority shareholders said it is going the Colombo Stock Exchange with an offer to buyout minority shareholders at 123 rupees a share.
The firm said in a stock exchange filing that the parent Bank of Ceylon which already 95.5 percent of the shares had indicated a willingness to buy the shares of minority shareholders.
The firm did not give a reason for the de-listing but it said on February 01, that the firm did not meet minimum public float rules of the stock exchange.
"The Board of Directors is in the process of evaluating the options available to it with respect to the aforesaid requirement and undertakes to duly notify the market in due course," the firm said at the time.
Pushed by anti-market interventionists the securities exchange slapped harsh minimum float involving 20 percent of issued shares or 10 percent if there was a minimum public float valued at 5.0 billion rupees.
At the time the rules were tighter than the New York Stock Exchange (which has a 100 million dollar minimum float). Under revised rules a minimum liquidity was introduced as well as a staggered share percentage.
Though the largest companies in Sri Lanka are relatively small the minimum float is still a 10 billion rupees (about 70mn dollars), under the less draconian rules.
The minimum public float rules came from interventionists after the central bank fired a stock market bubble by printing money to cut rates in 2011 eventually triggering a balance of payments crisis. (Colombo/Feb09/2018)