Sept 29, 2010 (LBO) – Sri Lanka’s stock exchange has approved the issue of new shares and attached warrants by Hotel Reefcomber to raise cash to revamp the hotel, a statement said. Hotel Reefcomber, which owns the Amaya Reef hotel on the southwest coast, plans to consolidate 10 shares to one and then sell a rights issue of two new shares for every existing one.
It has 157.3 million shares in issue.
The firm plans to sell 31.4 million shares at 25 rupees to raise 786 million rupees to refurbish the hotel.
The rights come with equity warrants that give the holder the right to buy a new share at a specified price in the future.
Reefcomber intends to give away four warrants with each new rights issue, two of which are to be exercised in 2011 and 2012 at 30 rupees each, and the other two to be exercised at 40 rupees each in 2015.
The stock exchange approval is subject to shareholder approval of the issue, according to the letter of approval released by the hotel.