By Jithendra Antonio
Despite market hype of a relatively unknown private placement regarding the recently announced Free Lanka Capital Holdings’ IPO, it is now said that major shareholders of the company including Browns Investments and Perpetual Holdings have divested a portion of their stake to a consortium of high net worth investors and institutions in a sellout.
“Both Brown Investments and Perpetual Holdings divested nearly 20% of the company’s share capital at Rs.4.70 per share in a sellout, said Rimoe Saldin, one of Free Lanka Capital Holdings directors.
He stressed that there had been no requirement to be mentioned about sellout of shares by majority stake holders in the Prospectus; as it had not been a ‘private placement’ where the company was trying to raise money through investors.
However, earlier there were some media reports suggesting that Free Lanka Capital Holdings completed a private placement of Rs.1.1 billion in January this year, facilitated by John Keells Stockbrokers, a unit of diversified conglomerate John Keells Holdings.
As per the prospectus, the company had 1068 million shares in issue before the IPO, where 70% is owned by Free Lanka Capital (Pvt) Ltd, Browns Investments (Pvt) Ltd. and Perpetual Holdings Ltd hold 4.12% each.
According to Saldin, the sellout was done before IPO proceedings, and thus the ownership of shares before the IPO were not properly reflected in the prospectus.
As per the prospectus, besides majority stakeholders, Lanka Orix Leasing, Next Ventures ltd, S.V. Somasundaram and Thurston Investments hold 1.99%, 1%, 0.94%, 14.36% of the company issued capital respectively. Ishara Nanayakkara, Ajith Devasurendra, and Bartleet Financ each hold 0.99% of the company.