Capitalisation of reserves, subdivision moves fail to boost Central Finance

An announcement of capitalisation of reserves, sub division of shares and appointment of new directors failed to boost Central Finance Plc shares yesterday.

CF announced that its Board at the meeting on 29 June resolved to recommend a distribution by the issue of new shares of the company credited as fully paid up by way of capitalisation of Rs. 365.4 million from and out of its general reserves to shareholders.

The Board also resolved to recommend a sub division of shares on the basis of five for one to boost the current number of shares in issue from 20.3 million to 101.5 million. Sub division will be done before the capitalisation of reserves.

Both moves are subject to shareholder and regulatory approval. 

Despite the moves Central Finance share price shed Rs. 21.70 (or 1.54%) and closed at Rs. 1,385.00. Around 84,000 shares traded.

The number of shares to be issued (post sub division) will be 3.383 million and the proportion in which shares are to be issued is one new share for every 30 shares held. The consideration for which the shares are to be issued is Rs. 365.4 million or Rs. 108 per share. The current stated capital is Rs. 203 million.

CF also announced the appointment of three new directors Kumar Jayasuriya, Dhammika Prasanna De Silva and Sunil Wickramasinghe. They were appointed after M.S. Wijenaike, G.C.B. Wijeyesinghe and C. Kiriella resigned.

Jayasuriya is the Chairman and Managing Director of Finlays Colombo and a Fellow of the Chartered Institute of Management Accountants UK and Chartered Association of Chartered Accountants UK.

De Silva, an Associate Member Chartered Institute of Management Accountants (CIMA) UK and a Chartered Financial Analyst (CFA) is the General Manager Credit at Central Finance whilst Wickramasinghe is currently the Chairman of Milco Ltd. He possesses 28 years of experience at Nestlé, holding various positions in the fields of Technical, Sales, Marketing and General Management in Sri Lanka and overseas. Served as an Executive Director at Nestlé Sri Lanka, prior to taking up appointment in 2005 as sales Director for Nestle Pacific Islands and later as General Manager – Nestle Papua New Guinea