Citrus Leisure Group Rs. 3.1 b Rights Issues draw Rs. 3.5 b demand

Citrus Leisure Group hotels three individual Rights Issues aimed at raising Rs. 3.1 billion had drawn applications worth Rs. 3.5 billion reflecting good demand including from minority shareholders. 

In January Citrus Leisure PLC announced a Rights Issue of 143 new shares for every 101 existing Shares or 378,354,954 shares at Rs. 4.20 per share thereby raising Rs. 1.58 billion.

Hikkaduwa Beach Resort Plc announced a Rights Issue of 19 new Shares for every 21 existing Ordinary Shares or 257,765,177 shares at Rs. 350 per share aimed at raising Rs. 902 million.

Waskaduwa Beach Resort PLC announced a Rights Issue of 35 new shares for every 52 existing ordinary shares or 376,826,892 shares at Rs. 1.80 per share aimed at raising Rs. 678.3 million.

The purpose for Rights Issues was to settle outstanding related party loans of the respective companies. All issues were underwritten by the main shareholders of the three entities.  

Following successful conclusion, Citrus Leisure Rights Issue of Rs. 1.589 billion (378.35 million shares) had drawn 695 applications worth Rs. 1.76 billion reflecting an oversubscription by Rs. 178.6 million.

Hikkaduwa Beach Resort’s Rs. 902.18 million Rights Issue (257.76 million shares) had drawn 545 applications worth Rs. 1.035 billion reflecting an oversubscription by Rs. 133.5 million.

Waskaduwa Beach Resort PLC Rights Issue worth Rs. 678.3 million (376.8 million shares) had drawn 842 applications requesting for shares worth Rs. 704.6 million reflecting an oversubscription by Rs. 26.3 million.

George Steuart and Company owns 75% stake in Citrus Leisure along with a related party 3.7%. Citrus Leisure in turns owns 82.86% in Hikkaduwa Beach which in turn owns 82.83% stake in Waskaduwa Beach.

Citrus said the purpose is to (i) settle outstanding related party loans of the company borrowed from George Steuart and Company amounting to Rs. 1.253 billion (ii) facilitate the full subscription of the Company’s’ entitlement in the Rights Issue of Hikkaduwa Beach Resort PLC (CITH) amounting to Rs. 181.2 million; (iii) subscribe to any additional shares required to raise the full amount under the Rights Issue of CITH up to a maximum of Rs.154.65 million (iv) primarily retire non-related party loans of fully owned subsidiary of the company, Citrus Silver Ltd., to the maximum extent possible if in the event of any funds raised via the Rights Issue, remaining with the company post subscribing to the Rights Issue of CITH up to a maximum of Rs. 154. 65 million. However, the board at its discretion would reserve the right to decide on the final bank loans to be settled at company/subsidiary level depending on the requirements of the lending institutions. The non-related party loans of Citrus Silver primarily identified for settlement are two (02) bank loans amounting to Rs. 114 million and Rs. 40 million.

Hikkaduwa listed its purpose as (i) settle outstanding related party loans of the Company borrowed from Citrus Leisure amounting to Rs. 566.3 million which is within the subscription amount by Citrus Leisure under its entitlement in the Rights Issue, (ii) facilitate the full subscription of the Company’s entitlement in the Rights Issue of Waskaduwa Beach Resorts (CITW) amounting to Rs. 219.38 million (iii) subscribe to any additional shares required to raise the full amount under the Rights Issue of CITW up to a maximum of Rs.116.47 million (iv) retire non-related party loans of the company to the maximum extent possible, if in the event of any funds raised via the Rights Issue, remaining with the company post subscription to the Rights Issue of CITW up to a maximum of Rs. 116.47 million, for the above purpose, the identified non-related party loan is a bank loan which will be partly settled up to Rs. 116.47 million.

Waskaduwa said (i) settle outstanding related party loans of the Company borrowed from Hikkaduwa Beach Resort PLC amounting to Rs. 342.42 million which is within the subscription amount by Hikkaduwa Beach Resort under its entitlement in the Rights Issue and ii) retire an amount equivalent to Rs. 335.8 million out of the outstanding non-related party loans borrowed from a Bank.