Bank Issue

Dec 24, 2010 (LBO) – Sri Lanka’s Union Bank plans to make a public share offer after a rights issue of 10 million shares at 25 rupees each to existing shareholders was oversubscribed by four times, a statement said. The bank has 20 branches including 05 in the north of Sri Lanka and is expected to open up to 10 new branches in the coming months. The bank plans to raise over 1.1 billion rupees through the rights issue, a private placement and a subsequent Initial Public Offering.

“The next phase of the fund raiser will be the private placement of additional 20 million shares,” the statement said.

“The shares would be issued on a tender basis and will incorporate a book building process.”

Subsequently, 15 million shares will be issued through an IPO planned for the first quarter of 2011 on which the bank is working with its advisors NDB Securities and Acuity stockbrokers.

The fund raising will help the bank meet all Central Bank capital adequacy requirements until 2015.