SMB Leasing to raise Rs. 2 b via Rights Issue

SMB Leasing has announced a Rights Issue in the proportion of five ordinary shares for every one existing ordinary share of the company for a consideration of Rs. 0.35 per share, to raise a total of Rs. 2.086 billion. 

The move entails issuance of 5.958 billion shares. The current stated capital of SMB Leasing is Rs. 919 million represented by 1.19 billion voting shares and 0.6 billion non-voting shares. 

Voting shares are held by 9,723 shareholders and the public holding is 83.65%.

Net assets per share as at 30 September 2020 was Rs. 0.57. SMB last traded on Friday at Rs. 1 (voting). The highest voting share price of SMB Leasing in the 30 September 2020 quarter was Rs. 0.60, and the lowest was Rs 0.30, whilst it last traded at Rs. 0.50.

The proceeds from the Rights Issue will be used in strengthening the core capital base of the company, in keeping with the company’s expansion plan and surpassing the new capital adequacy requirements. 

The proceeds of the issue will be utilised for the lending business of the company. Whilst Central Bank approval has been received, the Rights Issue is subject to shareholder and CSE approval. 

High net worth individual investor Dr. T. Senthilverl owns a nearly 30% stake in SMB Leasing followed by H.R.S. Wijeratne (16.5%) and HL Bank Singapore Branch (7.9%).