SLIC, BoC to invest Rs. 1.1 b for Seylan’s 24.7% stake

Public offering worth Rs. 1.9 b announced giving preference to existing shareholders

Seylan Bank as part of its recapitalisation programme initiated by the Central Bank, has raised Rs. 1.1 billion via a private placement with state owned giants Sri Lanka Insurance Corporation (SLIC) and Bank of Ceylon (BoC).
Seylan said SLIC bought 19.15 million shares and BoC acquired 13 million shares at Rs. 35 each. The shares amounted to 24.7% of the increased capital.
The private placement was as per directions by the Monetary Board to restructure and recapitalise Seylan Bank which faced problems as a result of the fraud and bankruptcy of Ceylinco Consolidated’s Golden Key Credit Card Company.
Seylan was directed by the Monetary Board to make arrangements to issue an appropriate number of new Ordinary (voting) shares so as to generate a capital infusion of Rs.3 billion for the recapitalization of the Bank by inviting state institutions to participate in a Private Placement of shares and the general public through a Public Offering of shares with preference being given to the existing Ordinary (voting) shareholders.
Seylan said the issue of shares by way of the Private Placement is subject to the Colombo Stock Exchange (CSE) approving in principle the issue and listing of the shares and obtaining shareholder approval at a General Meeting. Approval will also be sought from the Securities & Exchange Commission of Sri Lanka for the waiver of CSE Rule 5.4 (b) on the 20% limitation imposed in relation to the private placement of shares.
Seylan also announced a Public Offering of 54,290,000 Ordinary (voting) Shares at Rs.35/- each with preference being given to the existing Ordinary (voting) Shareholders to subscribe for a minimum of one (01) share for every two (02) shares held subject to prevailing shareholding limits as set out under the Banking Act No.30 of 1988 as amended.
The issue of shares is subject to the Exchange approving in principle the issue and listing of the shares and obtaining shareholder approval at a General Meeting.
The current stated capital of the Bank is Rs.2,542,420,324/- comprising of 43,560,000 Ordinary (Voting) Shares, 3,390,100 non-redeemable, non-cumulative, non-convertible and non-voting Preference Shares, 123,560,000 Ordinary (Non Voting) Shares and Share Premium of Rs.837,319,324/-.
Seylan said the share issue is primarily to meet the statutory capital adequacy and liquidity requirements of the Bank. Other objectives are to minimise interest rate risk and gap exposure and to enhance the Bank’s capacity of expanding the branch network and business volumes.
Listing applications to list the aforementioned Private Placement and Public Offering of Ordinary (voting) Shares on the Colombo Stock Exchange will be submitted shortly.
To secure conformity with new statutory provisions and amendments thereto including those of the Companies Act No.7 of 2007, the Board of Directors have also recommended the adoption of new Articles of Association for the Bank subject to the approval of the Monetary Board of the Central Bank of Sri Lanka and the Shareholders at a General Meeting.
An Extraordinary General Meeting of the Shareholders will be convened shortly to give effect to this as well, Seylan said.