Kotagala’s Rs. 790 m Rights Issue draws Rs. 1 b demand

Kotagala Plantations PLC’s Rs. 790 million Rights Issue has seen demand worth Rs. 1 billion, reflecting a successful oversubscription. 

The Issue involved 263,287,500 Ordinary Shares at Rs. 3 per share on the basis of seven new shares for two held. The aim was to raise Rs. 790 million. 

Kotagala said the Rights Issue had been oversubscribed with total subscription received amounting to Rs. 1.01 billion inclusive of additional shares applied for. It said the information was subject to the realisation of cheques, bank confirmation, elimination of duplications (if any) and other verifications.

Consolidated Tea Plantations Ltd. owns 45% in Kotagala and related party Lankem Tea and Rubber Plantations owns 21.76%. The percentage of shares held by the public of Kotagala as of 30 June was 32.77% with 13,439 public shareholders.

A part of the proceeds from the Rights Issue will be utilised to settle funds amounting to Rs. 564.3 million already advanced by the major shareholders to support the working capital requirements of the company.

The balance funds amounting to Rs. 225.5 million raised will be utilised to further support the working capital needs of the ongoing operations of the company.

In the first quarter of FY21, Kotagala returned to profitability. Revenue rose to Rs. 920 million, up from Rs. 765 million a year earlier. Gross profit rose from Rs. 46 million to Rs. 130 million. Group pre-tax profit was Rs. 37.4 million as against a loss of Rs. 24.5 million 

In FY21, Group revenue amounted to Rs. 3.2 billion and gross profit was Rs. 211.4 million. Pre-tax loss was Rs. 240 million and after-tax loss was Rs. 251.8 million.