Sri Lanka IPO pricing based on latest financials: advisors

9:46 AM // 0 comments // Unknown // Category: news Apr 26, 2011 (LBO) - Financial advisors for a forthcoming share issue by Sri Lanka's Expolanka group have defended the pricing of the public offer at more than twice that of a private placement late last year.


Expolanka Holdings is to raise 2.4 billion rupees by issuing 172 million ordinary voting shares at 14 rupees each with the initial public offer opening on May 12.

Previously some shares had been placed at 6 rupees each. Proceeds of new shares issued in the IPO will be used for expansion and to pay down debt.

Chinthaka Ranasinghe, assistant vice president of John Keells Capital, lead manager and financial advisor to the IPO, said the bulk of the funds would be used for working capital with the rest going for expansion and loan repayment.

Expolanka has a regional freight and logistics business stretching across, India, Bangladesh, Vietnam and Africa and has investments in tertiary education, business process outsourcing.

Krishan Balendra, president, Corporate Finance & Group Strategy of John Keells Holdings, said the private placement of shares was done late last year before the latest financial results of Expolanka were known.

"There's no significant difference between the pricing in September 2010 and the pricing now," he told a news conference held to formally announce the IPO.

He said the private placement was done at a time when the latest profit numbers were not known and that those investors were "possibly locked in for two years."

According to the Expolanka prospectus John Keells Holdings has 83.3 million shares or a 4.6 percent stake in Expolanka prior to the IPO.

Ceylon Investment had 41.6 million shares or 2.33 percent, Lanka Strategic Investments 16.7 million shares or 0.93 percent and Softlogic Holdings 16.5 million or 0.93 percent along with small stakes by Falcon Trading, Timex Garments and a few individuals.

source - www.lbo.lk