Sri Lanka Newspapers Saturday 28/04/2012

BOC boost
First Lankan bank to issue international bond: US$ 500mn offer 7.7 times oversubscribed, attracts US$ 3.86bn

The country received a huge boost yesterday as state banking giant Bank of Ceylon, the first Sri Lankan bank to issue an international bond, saw investors clamouring for a piece of the investment opportunity which saw the US$ 500 million bond issue attract bids amounting to US$ 3.86 billion.

This comes as very good news for the economy struggling to contain a current account problem, with foreign investments taking longer than expected to materialise.

"The bond issue was priced at a yield of 6.875 percent and the offering was oversubscribed by 7.7 times with total orders received amounting to US$3.86 billion. BOC intends to use the proceeds for general corporate purposes," the bank’s Chairman BOC Dr. Gamini Wickramasinghe said in an email from Washington DC, USA.

Issuer and issue ratings for the Notes are B1 and BB- by Moody’s and Fitch, respectively, with a stable outlook. Bank of America Merrill Lynch, Citi and HSBC were the Joint Lead Managers and Bookrunners.

"The bond issuance represents a key milestone for the Bank of Ceylon as the leading innovator in accessing new pools of funding and underscores investor confidence in the Bank of Ceylon story. With this bond issuance, BOC has now accessed the global investor base," Dr. Wickramasinghe said.

BOC is the leading commercial bank in Sri Lanka in terms of total asset size and has the largest market share in loans and advances to customers and customer deposits. BOC was established in 1939 and is wholly owned by the government of Sri Lanka.
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A big crossing yesterday in The Finance Company PLC, the country’s oldest finance company, amounting to over 7.1 million shares at a price of Rs.50 boosted turnover on the Colombo bourse to Rs.778.9 million, up from the previous day’s Rs.391.4 million, although both indices were down – the All Share by 15.42 points (0.28%) and the Milanka by 7.09 points (0.15%) with 68 gainers running behind 94 losers.

The Finance crossing was valued at Rs.357.1 million, brokers said.

They said that the 11.82% stake in The Finance was done Rs.20 over the prevailing market price and speculated that some high net worth investors were on the selling side with the National Savings Bank believed to be the buyer.

Given that a 60% premium to the market had been paid and The Finance’s net asset value is negative, eyebrows have been raised about this transaction.

Outside the deal in The Finance the market was dull with JKH being the main business generator contributing Rs.70.4 million to turnover with over 0.3 million shares done at Rs.205 with the counter closing 40 cents down at Rs.203.20.

Apart from the crossing, over 0.8 million shares of The Finance was traded closing on the floor Rs.9 up at Rs.39 with the floor trades worth almost Rs.37 million.

Regnis once again demonstrated volume gaining Rs.12.40 to close at Rs.117 on over 0.3 million shares. Citrus Leisure, up 30 cents to close at Rs.26.90 on nearly 1.2 million shares, Swarnamahal Financial Services up 10 cents to close at Rs.8.80 on nearly 1.5 million shares, Citrus Kalpitiya up 10 cents to close at Rs.7.70 on 1.2 million shares and Colombo Land down 40 cents to close at Rs.38.20 on nearly 0.6 million shares demonstrated share volumes.

Carsons closed Rs.6.60 up at Rs.475 on 52,818 shares.

People’s Leasing Company announced a final dividend of 50 cents per share for 2011/12 following shareholder approval at a June 29 AGM. The share will trade XD from July 2 with payment on July 11.

Piramal Glass announced a first and final dividend of Rs.0.36 per share for 2011/12 after shareholder approval at an August 7 AGM. The share will trade XD from August 8 and payment on August 16.

The Lighthouse Hotel announced a final dividend of Rs.2 per share for 2011/12 following shareholder approval at a June 28 AGM with the share trading XD from June 29 and payment on July 10.

LOLC announced that it has issued Rs.3 billion worth of unsubscribed, unlisted subordinated seven-year debentures on a going concern, loss absorbent basis to two private companies - Saakya Capital (Pvt) Ltd on Feb. 23 (Rs.2 billion) and Satya Capital on Feb. 27 (Rs.1 billion).

Following transfers Saakya Capital now remains sole debenture holder of the total amount of Rs.3 billion, LOLC’s Stock Exchange filing said.

Melstacorp said that following its mandatory offer to the shareholders of Lanka Milk Foods it had between March 27 and April 19 acquired 82,727 LMF shares between a low of Rs.97.50 and a high of Rs.100.

Melstacorp with parties acting in concert now hold slightly over 20.1 million LMF shares amounting to approximately 50.33% of the company.

Subsequent to February 15 when the mandatory offer obligation was incurred, Mr. Amita Lal Gooneratne was appointed to the board of Melstacorp on February 23.

Gooneratne, the former CEO of Commercial Bank, had held 1,000 shares acquired before September 12, 2010 up to February 12, 2012 and had further acquired on September 23, 2010 a further 333 shares on a rights issue at Rs.70 per share.

"Mr. Gooneratne now holds 1,333 shares as at date and is a party acting in concert with the offeror," Melstacorp said.
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