Initial Announcement
Rights Issue
22 March 2011
Date of Initial Announcement :- 09-Mar-2011
Proportion:- Fifteen (15) new ordinary shares for every One (01) share held
Issue Price:- Rs.25.00/-
The number of shares to be issued :- 103,500,000 ordinary shares
EGM / Provisional Allotment: 21.Apr.2011
XR: 25-Apr-2011
Dispatch of Provisional Letter of Allotment : 29.Apr.2011
Rights Trading Commences on : 06.May.2011
Renunciation: 13.May.2011
Last Date of Acceptance & Payment: 16.May.2011
Latest Announcement
Rights Issue
07 June 2011
Please note that 53,100,000 Ordinary Shares of the Company were listed on 7th June 2011, pursuant to a 15:1 Rights Issue.
What does this mean?
Carefully read the amounts highlighted in blue. This means that although LDEV planned to issue 103.5mn share by way of a rights issue, only 53.5mn shares were issued and subscribed. The Rights issue was a failure and not fully subscribed.
What are the Implications
a) Share capital my have not got diluted as previously expected.
b) Only few objective of rights issue would have been met. Please read the purpose of the Rights issue. http://www.cse.lk/cmt/uploadAnnounceFiles/5851299655983_446.pdf
c)LDEV may have acquired the Agrapatana Plantation from the proceeds of the rights subscription but other plans of Hydro Power and Leisure project may not materialize
d) As the subscription would have predominantly come from Lankem Group Companies, the free float will remain almost the same.
e) LDEV may be renamed as the Agarapatna Plantation and may probably be the only plantation company that may be available at these price levels
Current Share Price offer greater discount than expected. How?
Please see below the two separate calculations for the expected and adjusted theoretical ex-right price of LDEV subsequent to the Rights issue.
Expected Theoretical Ex-rights Price based on full subscription of rights.
Cum Rights Price............... 1 Share = Rs 75
Rights Proportion.............. 15: 1
Proposed Rights................15 Shares at Rs 25 = Rs 375
Ex-Rights.............................16 Shares = Rs 450
Ex-Rights Price........................ Rs 28/- per share
Real Theoretical Ex-Rights Price due to under subscription of rights
Issued Share Capital Prior to the Rights Issue. = 6.9mn Shares
Actual Rights Subscribed = 53.5mn
Actual Rights proportion = 53.5mn shares; 6.9mn shares = 7.75 shares : 1 Share
7.75 Shares@ Rs 25/= ................. Rs 194/=
Cum Rights Price...........................Rs 75/=
Cost of 8.75 shares.........................Rs 269/=
Real Ex-rights Price....................... Rs 31/=
The Market Price of LDEV as at 17th June 2011 was Rs 21/=. Therefore one may consider that LDEV trade at a larger discount to its theoretical valuations.
Last edited by Quibit on Sun Jun 19, 2011 9:02 pm; edited 1 time in total