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Thursday Nov 14, 2024
Thursday, 1 September 2011 00:00 - - {{hitsCtrl.values.hits}}
By Dinali Goonewardena
Malwatte Valley Plantations said it was not going ahead with plans to go for a rights issue aimed at raising Rs. 606 million and would instead be going for a loan of Rs.750 million and USD 5 million. ‘Conditions on the Colombo stock market were not conducive for a rights issue and that was why the majority of shareholders voted against the option of a rights issue,” Malwatte Valley Plantations Chairman and Managing Director Willem Bogstra told the Daily FT.
Wayamba Plantations owns 62% stake in the Company whilst Bogtstra owns 5% stake.
The Company has 17,683 voting shareholders, of which 17,319 categorised as owning less than 1,000 shares and collectively 10.3%.
The funds were earmarked by its subsidiary Malwatte Hotels and Resorts to construct, develop and operate a resort hotel in Maanagalaa Islands in the Republic of Maldives, a stock exchange filing said. Bogstra said the loan would be through a mix of debt and equity funding.
He said the Hilton would be the hotel operators in the Maldives and that this was a follow on from on-going refurbishment of estate bungalows for hoteliering and tourism purposes.
The company sought to pass resolutions to issue 4.6 million ordinary voting shares and 4.6 million ordinary non voting shares through a rights issue but this was voted against by shareholders as was the proposal to issue 44,918,032 ordinary voting shares and 44,918,032 ordinary non voting shares through a rights issue. Issue price was Rs. 6.75 per (voting) and Rs. 5.50 (non-voting) per share. The voting share price closed at Rs. 6.80, up by 30 cents and non voting closed 10 cents down to Rs. 6.40. Last week’s closing prices were Rs. 6.60 and Rs. 6.20 respectively.
The company posted record results in 2010 when the rubber sector performed well but profits slipped 1.4 % to Rs.291 m when turnover grew 1.2% to Rs.1.74 b in the first 6 months of 2011.
In 2010 Malwatte Valley’s Profit After Tax grew 423% over 2009 to Rs.424 m. Sri Lanka saw a record high tea crop of 329.3 m kgs and auction prices reached a record high of Rs.370.61 per kg - a 3% increase. Rubber crops from January to October were 127.9 m kgs, a 12.4% higher output than 2009.
