CDB goes for Rs. 718 m Rights

Friday, 24 June 2011 02:52 - - {{hitsCtrl.values.hits}}

Citizen Development Business Finance Plc (CDB) is going for a Rights Issue to raise Rs. 718 million to further strengthen business and the Balance Sheet.

The Board of Directors of CDB recently resolved to propose to shareholders a one for six Rights on voting shares at Rs. 70 each and one for seven for non voting shares at Rs. 45 each.

Accordingly post Rights which is subject to shareholder and regulatory approval, 6, 614,175 new voting shares and 5,669,293 non voting shares will be added. The current stated capital of CDB Plc is 39,685,048 voting shares (or Rs. 396.85 million).

Funds raised via Rights will be used to part finance the leasing, hire purchase and loan disbursements during the current 2011/12 financial year in addition to strengthening the Balance Sheet.

Last week it dipped by Rs. 9.60 to Rs. 81.20. The stock's 52-week highest price was Rs. 165 whilst the lowest was Rs. 44.50. CDB voting shares yesterday closed at Rs. 78, down by Rs. 1.60.

CDB Plc in 2010/11 financial year recorded a consolidated net profit after tax of Rs. 529.8 million, which was a seven fold increase over the previous year.

The Company’s total asset base grew by 54% to Rs. Rs.10 billion whilst revenue was up 47.6 % or Rs. 719 million. It achieved a loan book growth of 54%.

The key contributors to the bottom-line figure have been from the growth of net interest income figure which recorded a growth of 68% surpassing Rs. 800 million and a mark to market adjustment of Rs. 312 million deriving from investment in shares.

CDB’s NPL Ratio was 3.64% which the company described as healthy as a result of the growth of the loan book as well as decline in absolute value of NPL portfolio.