Amidst doom and gloom in the market, it was sunshine for Citrus Leisure as its first warrant conversion had been oversubscribed by 30% whilst the move brought in fresh funds worth Rs. 944 million.
The warrants of 2011 ceased to trade on 30 September and holders of the warrants were entitled to exchange them with an equal number of ordinary shares at Rs. 30 per share.
When the deadline ended last week, the amount of shares following conversion of warrants (at Rs. 30 per share) had been around 40 million whilst the specified amount was 31.46 million reflecting an oversubscription of nearly 30 per cent.
Citrus share yesterday was trading between a high of Rs. 63.30 and a low of Rs. 59.70 before closing at Rs. 60, down by Rs. 3.20 reflecting the overall market sentiments. Around 134,400 shares of the company traded.
All major shareholders as well as others had converted the warrants. Citrus Leisure is owned nearly 37% by Divasa Equity Ltd, a company promoted by advertising industry trio deleted deleted, Varuni Amunugama Fernando and Sarwa Ameresekere.
Citrus late last year announced a multibillion five-year fund raiser inclusive of a Rights Issue backed by warrants exercisable in 2011, 2012 and 2015. The issue was oversubscribed with shareholders subscribing for an additional 7.9 million shares, an oversubscription of six times for additional shares.
Funds raised via the conversion of 2011 warrants will be used to finance the construction of 150-room luxury resort in Waskaduwa.
This venture is at the final stages of clearing the Environmental Impact Assessment requirements following completion of which construction is expected in late November.
The other venture of Citrus is Kalpitiya Beach Resort, another 150-room luxury property. Both resorts will be built with an investment of Rs. 1.9 billion each.
The other two warrants (2012) and (2015) closed at Rs. 22 and Rs 17.20 respectively, also lower in comparison to last week. The conversion of 2012 warrants (amounting to 31.4 million) is also at Rs. 30 each whilst the 2015 conversion (63 million) is at Rs. 40 each.