Digging Deep

Feb. 17 (LBO) – Sri Lanka’s Seylan Bank Friday announced plans to boost capital by a billion rupees through a rights issue. The bank plans to issue 83.5 million in non-voting shares each at Rs. 12.50 to both voting and non-voting shareholders, Company Secretary M R S Gunasekara said in a statement to the stock exchange.

Each voting and non-voting stockholders will get one share for each stock they hold.

The objective of the rights issue is primarily to increase Tier I capital of the bank in order to comply with the capital adequacy requirements of the Central Bank, Gunasekera said.

Sri Lanka’s Central Bank wants all commercial banks to raise their capital to US$ 25 million or Rs. 2.5 billion by end 2007.

Part of the funds will also be used for future expansion plans and match long-term lending facilities, the statement said.

Nearly 50 percent of Seylan’s shares are held by the Ceylinco Consolidated group directly or indirectly through their subsidiaries.

Gunasekera declined to comment if Ceylinco Group would take up their full allotment in the rights issue.

That’s too early