Atarah Capital successfully advices Blue Diamonds’ recently concluded Private Placement and Rights Issue

ACPL Head of Investment Banking Chandana Wijesundara

Atarah Capital Ltd., (ACPL) acted as the Exclusive Transaction Advisor for the Private Placement by Ambrosia Management of Singapore in January 2023, and thereafter advised Blue Diamonds Jewellery Worldwide PLC (BDJW) on the Right Issue.

ACPL Head of Investment Banking Chandana Wijesundara said it was a great opportunity for the Company to advise and manage both the Private Placement worth Rs. 25 million and the Rights Issue worth of Rs. 125 million of the only listed jewelry manufacturer in the Colombo Stock Exchange.

The first endeavour of the Private Placement of shares to a Singapore based investor Ambrosia Management began in November 2022 and was completed in January 2023.

ACPL commenced with initial advice on the tasks to be completed, preparation of relevant documentation and coordinating the approval process with SEC and CSE.  

“It was a challenging process and a case study for raising capital by a listed company that was trade suspended due to enforcement action, perhaps the first time a listed company has successfully executed such a task under such circumstances,” Wijesundara said.

“We had to first clear the process with the Regulators (SEC and CSE) prior to making market disclosures and obtaining shareholder approval. Completion of the said capital raising was a critical achievement for BDJW in the path to reviving the Company, which was subject to CSE’s enforcement action due to the Emphasis of Matter on Going Concern,” he added.  

Immediately subsequent to the Private Placement, ACPL continued advisory to BDJW where the Company pursued another round of fund raising by way of Rights Issue. ACPL acted as the Managers of the Rights Issue, facilitated discussions with the Regulators, assisted the Company to structure the Rights Issue and thereafter successfully handled the end-to-end regulatory approval process and coordinated all tasks with relevant “parties to the issue”. Resolving regulatory enforcement action of the CSE which prevailed at that time has been a challenge but successfully managed and rectified by the Company soon after obtaining CSE’s in-principle approval for the Rights Issue. 

Considering the circumstances, the process required some customisation whilst certain additional disclosures were made in the initial market announcement as well as in the shareholder circular compared to the standard disclosures that are generally made in a Rights Issue. 

“The circumstances prevailing at the time of announcing the Rights Issue were unique and could be the first time a listed company went ahead with a Rights Issue to raise further capital with an ongoing enforcement action and managing to lift the suspension prior to shareholder approval to re-start trading on CSE. Our long-standing experience and the in-depth knowledge with regard to listing rules and expertise on regulations on the due process to follow assisted us to successfully complete the assignment,” Wijesundara emphasised.

The Private placement followed by the Rights Issue, which saw an impressive subscription level would create a solid funding base for BDJW to expand their business in the future. 

Atarah Capital Ltd., is a company Licensed and Regulated by Securities and Exchange Commission (SEC) of Sri Lanka, to perform the functions of a Market Intermediary in the capacity of a Corporate Finance Advisor in terms of Section 94 of the SEC Act. No. 19 of 2021