Taj Lanka’s two major shareholders to capitalise loans worth Rs. 1.3 b

Monday, 27 January 2025 02:32 - - {{hitsCtrl.values.hits}}

Move aimed at strengthening financial position
Private placement of 32.3 m shares at Rs. 41 each proposed
TAL Hotels and Resorts owns 58.14% stake and IHOCO BV 24.6%; have lent Rs. 1.07 b and Rs. 242 m respectively

TAL Lanka Hotels PLC has announced a move by major shareholders to capitalise loans worth Rs. 1.3 billion by way of a private placement of shares.

The Company has obtained loans from its major shareholders – TAL Hotels and Resorts Ltd., and IHOCO BV worth $ 4.47 million or Rs. 1.32 billion. Total outstanding capital due is $ 3.65 million to TAL $ 820,000 to IHOCO.

TAL holds 58.14% stake in the Company and IGOCO 24.6%.

In order to strengthen the financial position, the Company capitalise the loans due and payable to the Major Shareholders by converting such loans amounting to an aggregate of $ 4,469,962 (equivalent to Rs. 1,321,369,490) into equity by issuing ordinary voting shares in the Company to the Major Shareholders. The price at which new shares will be issued is Rs. 41 per share.

Accordingly it is proposed to issue 26.3 million shares worth Rs. 1.07 billion to TAL and 5.9 million shares worth Rs. 242.4 million to IHOCO.

The TAL Lanka Board said the issue price is “fair and reasonable” to the Company and all existing shareholders of the Company.

TAL Lanka share price on Friday closed at Rs. 25.60, up by Rs. 1.60 or 6.67%. Only 123,353 shares traded. TAL’s net assets value per share is a negative Rs. 11.51 as of 31 December 2024, lower in comparison to Rs. 13.08 a year ago but higher in comparison to Rs. 9.96 as at 31 March 2024. The Company is saddled with a retained loss of Rs. 4.8 billion.

As at 31 December 2024, TAL had Rs. 3.5 billion in long-term interest bearing borrowings. Short term borrowings amounted to Rs. 568 million, down from Rs. 1.1 billion a year ago.

The current stated capital of the Company is Rs. 1.39 billion.

The public holding of the Company is 17.24% held by 9,853 shareholders.

The issue of shares by way of a Private Placement is subject to the fulfilment of certain conditions, including the Colombo Stock Exchange approving in principle the issue and listing of the Private Placement Shares and obtaining shareholders of the Company at a General Meeting.

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