MBSL gets bigger

State owned Merchant Bank of Sri Lanka (MBSL) appears to become a financial conglomerate as it continues expand its scope with many moves including a Rights Issue.
The Bank last week announced a one for two Rights Issue to raise Rs. 540 million.
It will offer 45 million ordinary shares at Rs. 12 each to expand its current stated capital from Rs. 1.06 billion.
The objective of the Rights Issue is to part settle the short term borrowings and the balance will be used to expand MBSL’s lending portfolio.

*Goes for Rs. 540 m Rights Issue to part retire short term debt and expand lending portfolio
*Gets involved with another Ceylinco firm by striking consultancy deal with Ceylinco Building Society for Rs. 1 m per month In its latest string of acquisitions or management deals, MBSL said it has decided to enter in to a Consultancy Agreement to manage Ceylinco Building Society, which is established under the National Housing Act No.37 of 1954.
This will be done for a management fee of LKR 1 million payable on a monthly basis, to boost customer confidence and stabilise their business activities.
Earlier on MBSL said it has also made an investment in Ceylinco Investment Company Limited (CICL) by infusing fresh capital amounting to Rs. 5 million.
CICL has issued 500,000 ordinary shares against this investment at a price of Rs. 10/- per share. Consequent to this transaction, MBSL holds 46% of the issued shares of CICL.
Ceylinco Investment Company Ltd. has 37% holding in The Finance Company PLC which is currently being managed by MBSL on a mandate received from the Central Bank of Sri Lanka.
The five major shareholders of The Finance as at September 30, 2009 are Ceylinco Investment Company Limited - 6,670,230 (37.13%); Pershing LLC S/A Averbach Grauson & Co - 1,498,500 (8.34%); Ceylinco Insurance PLC - 579,178 (3.22%); Desh Dr J L B Kotelawala - 526,427 (2.93%); Y S H I K Silva - 162,000 (0.90%) and Primelands (Private) Limited - 151,900 (0.85%).
On the other hand the shareholding structure of Ceylinco Investment Company comprises of Merchant Bank of Sri Lanka PLC - 500,000 (46.35%); J W M J P K Ratnayake (Chairman of MBSL) 500,000 (46.35%) and Others - 78,760 (7.30%) with an issued share capital of 1,078,760 (100%).