Sri Lanka’s EAP Broadcasting to sell Rs3.0bn in 4, 5-year debt

COLOMBO (EconomyNext) – Sri Lanka’s EAP Broadcasting Company Limited, which operates television and radio stations including Swarnavahini and Shree FM, is offering up to 3.0 billion rupees in 4 and 5 year listed, tax free debt.

The 4-year debt will pay 10.5 percent at the end of the year and the 5-year debt will pay 11 percent in quarterly coupons which gives an effective rate of 11.46 percent.

The firm offers a minimum of 1.5 billion rupees of debt, with an option to increase it to 3.0 billion rupees.

"The funds from the issue will enable us to invest in lands and property development initiatives which will add strength to our overall offering whilst simultaneously increasing the value of our asset base," Mano Tittawella, Deputy Chairman of EAP Broadcasting said in a statement.

The firm invest a billion rupees to buy shares in a subsidiary Galaxy Landmarks Limited, and also make an intercompany loan of another 2.0 billion rupees at 12.0 percent. Interest will come at the end of the project when it is expected to be sold for 2.25 billion rupees.

Separately EAP Broadcasting will also start a sinking fund setting aside cash to meet repayments.

Galaxy will buy several properties from ETI Finance, its holding company. It will develop Galaxy Impala, a 7-storey entertainment and Cineplex complex in Rajagiriya, where an old cinema is located.

Lanka Ratings has given the debentures a BBB rating.

Revenues rose 7.4 percent to 2.56 billion rupees in the year to March 2015 from a year earlier, according to unaudited accounts. Cost of sales fell 3 percent to 1.09 billion rupees expanding gross profits 16.9 percent to 1.47 billion rupees.

Net profits rose 69 percent to 444 million rupees. Auditors KPMG said it gave an unqualified opinion for 2014.

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