Fresh Capital

Jan 07, 2011 (LBO) – The Colombo Stock Exchange has approved an application by The Finance Company, a troubled financed firm that is recovering after a run, for a public share issue to raise 1.6 billion rupees for fresh capital, a statement said. The firm will issue 40 million ordinary voting shares at 40 rupees each to raise cash for working capital needs especially to fund investments.

The subscription list opens on January 21, 2011, the CSE said in a statement.

The prospectus is to be delivered to member firms and trading members on January 11.

The Finance was ordered by the central bank to raise fresh capital by attracting new investors and converting deposits into shares.

The firm has said it is to issue 100 million non-voting shares at 20 rupees each to deposit holders to convert into equity part of their deposits which were blocked after the firm suffered a run.

The shares will be issued to fixed deposit holders to convert 10 percent of fixed deposits held with the firm as at September 21, 2010 into equity.

The regulator intervened to stabilize The Finance Company after it suffered a run with the collapse of several firms in its parent Ceylinco Group