Shareholders vote down Rs. 825m Rights Issue of Orient Garments
Wednesday, 21 January 2015 00:49
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Shareholders of Orient Garments Plc (OGL) yesterday voted down a planned Rs. 825 million worth Rights Issue saying its objectives may not achieve desired results.
The OGL held an Extraordinary General Meeting (EGM) yesterday to obtain shareholder approval for the one for one rights issue at Rs. 15 each. The move meant issuance of 55 million new shares. Funds raised via Rights were to be used to retire debt.
After a differences of opinion at the EGM, the resolution was put to vote. Key shareholders including Dr. T. Senthilverl and a few others along with proxies voted against. The resolution was voted down by 57% of those present at EGM including those holding proxies. Votes in favour was 43%.
As at September 2014, Dr. Senthilverl held 45.4% stake whilst management and single largest shareholder Adam Investments collectively held 39.8%.
OGL previously said the rights issue was called to infuse much needed capital to meet overdue statutory payments and other outstanding which have been hampering the progress of the company.
OGL said the rights issue is primarily to safeguard the employment of over 4,000 faithful workers who have stood by the company through thick and thin and to drive the operations forward with renewed vigour and excellence.
Since the takeover on 8 January 2014, OGL has spruced up its compliance standards, increased the number of machines in operation by 76% – from 1,100 to 1,940 machines –and carried out an employee skill upgrade initiative resulting in improved efficiency and greater confidence by its highly quality-conscious international buyers. The revamped marketing department has built a strong confirmed order book securing a bright future for the company, OGL said in a statement prior to the EGM.
