SLT goes for 4.74% stake private placement to secure public float

Sri Lanka Telecom (SLT) yesterday announced plans to go for a private placement of 4.74% stake to local and foreign institutional investors to comply with minimum public shareholding to remain a listed entity.

The stake amounts to 89.766 million shares. The price at which the shares to be issued has not been determined yet. SLT said it will be announced after a share valuation, feedback from potential investors and resolution by SLT Directors. 

Trading of SLT shares were suspended to facilitate the announcement. After it resumed SLT closed the day a Rs. 23.50, down by 20 cents. Its highest share price in the quarter ended June 30 2018 was Rs. 30 and the lowest was Rs. 23.70.  Net asset per share of SLT as 30 June was Rs. 32.18, and at Group level it was Rs. 40.10.

In a filing to the CSE, the Company said the primary purpose of carrying out the private placement is to meet the minimum public shareholding requirement as per the listing rules. 

At present Secretary to the Treasury holds 49.50% of the issued share capital while Global Telecommunications Holdings NV holds 44.98%. The company’s present public holding is at 5.52% held by 12,299 Public shareholders.

Funds expected to be raised through the issue will be utilised to restructure the debt portfolio of SLT by refinancing short term borrowings. As at June 30 2018, SLT Group had Rs. 19.3 billion in short term borrowings and Rs. 25.6 billion in long-term tenure.

Acuity Partners Ltd., a leading Sri Lankan investment bank has been mandated as the Financial Advisor and Manager to the Transaction.

On Friday, SLT said it has continued its growth momentum across all key business areas including Fixed, Mobile, Broadband, Enterprise Solutions, Wholesale and PayTV to record a consolidated revenue of Rs. 39.4 billion for the first half of 2018, demonstrating a growth of 5.5 % Year-on-Year. 

The Group reported a Rs. 2.8 billion net profit during the first half of 2018, demonstrating a 13.5% growth compared to the same period in the previous year. The operating cost for the period is Rs. 27.2 billion, with a lower Year-on-Year increase of 3.3%. Disciplined cost management and operational efficiencies together with revenue growth show the group EBITDA reaching Rs. 12.2 billion with an improved margin of 30.9% compared to 29.4% the year before. The Fibre-To-The-Home (FTTH) services is noteworthy, having shown very strong growth potential, it has almost doubled its revenues compared to the first half of 2017.

During the period under review, the group invested Rs. 10.8 billion for the acquisition of property, plant and equipment as well as intangible assets aimed at technology upgrades, infrastructure expansions, new connections, IT and system upgrades, etc. 

In line with increasing investments, the group depreciation increased by 10.2% to Rs. 9.1 billion. The group reported an operating profit of Rs.3.1billion during the first half of 2018 and Profit before tax of Rs. 3.6 billion with a 12.9% and 16.2% Year-on-Year increase respectively.