Citrus hotels to raise Rs. 3.1 b via Rights to settle related party borrowing

Thursday, 11 January 2024 01:40 - - {{hitsCtrl.values.hits}}

Citrus hotels yesterday announced plans to raise Rs. 3.1 billion via Rights Issues to settle related party loans.

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 or 376,826,892 at shares Rs. 1.80 per share aimed at raising Rs. 678.3 m.

The purpose for Rights Issues is to settle outstanding related party loans of the respective companies.

Citrus said the purpose is to settle outstanding related party loans of the Company borrowed from George Steuart and Company amounting to Rs. 1,253,230,305 (ii) Facilitate the full subscription of the Company’s’ entitlement in the Rights Issue of Hikkaduwa Beach Resort PLC (CITH) amounting to Rs. 181,200,674-; (iii) Subscribe to any additional Shares required to raise the full amount under the Rights Issue of CITH up to a maximum of Rs.154,659,829; (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. 154,659,829. 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 Ltd primarily identified for settlement are two (02) bank loans amounting to Rs. 114,000,000 and Rs. 40,000,000.

Hikkaduwa listed its purpose as (i) Settle outstanding related party loans of the Company borrowed from Citrus Leisure PLC. amounting to Rs. 566,317,618, which is within the subscription amount by Citrus Leisure PLC 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 PLC (CITW) amounting to Rs. 219,386,694 (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, 473,809 (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, 473,809; For the above purpose, the identified non-related party loan is a bank loan which will be partly settled up to Rs. 116,473,809.

Waskaduwa said (i) Settle outstanding related party loans of the Company borrowed from Hikkaduwa Beach Resort PLC amounting to Rs. 342,427,902, which is within the subscription amount by Hikkaduwa Beach Resort PLC under its entitlement in the Rights Issue and ii) Retire an amount equivalent to Rs. 335,860,503 out of the outstanding non-related party loans borrowed from a Bank.