Apr 26, 2011 (LBO) – Financial advisors for a forthcoming share issue by Sri Lanka’s Expolanka group have defended the pricing of the public offer at more than twice that of a private placement late last year. Expolanka Holdings is to raise 2.4 billion rupees by issuing 172 million ordinary voting shares at 14 rupees each with the initial public offer opening on May 12.
Previously some shares had been placed at 6 rupees each. Proceeds of new shares issued in the IPO will be used for expansion and to pay down debt.
Chinthaka Ranasinghe, assistant vice president of John Keells Capital, lead manager and financial advisor to the IPO, said the bulk of the funds would be used for working capital with the rest going for expansion and loan repayment.
Expolanka has a regional freight and logistics business stretching across, India, Bangladesh, Vietnam and Africa and has investments in tertiary education, business process outsourcing.
Krishan Balendra, president, Corporate Finance & Group Strategy of John Keells Holdings, said the private placement of shares was done late last year before the latest financial results of Expolanka were known. “There’s no significant difference between the pricing in S