Seylan going ahead with Rs. 2 b private debenture

Seylan Bank is going ahead with a Rs. 2 billion unsecured redeemable debenture issue via a private placement.

Funds will be raised by the issuance of 10 million unsecured redeemable debentures of the par value of Rs. 1,000 each with an option to issue a further 10 million debentures in the event of an oversubscription.

The move, which was approved by a Board resolution on Friday, is subject to regulatory and shareholder approval. Plans to issue these debentures were first announced and approved in October 2010.

This was abandoned subsequently and in February last year, Seylan raised Rs. 4.69 billion by way of a Rights Issue for voting and non voting shareholders at Rs. 75 and Rs. 35 per share on the basis of one for three held.

This was to boost Tier 1 capital and to mobilise long term funds to match long-term lending and also to facilitate the bank’s future restructuring and expansion program.