The move has been on the cards at least since early 2009 and yesterday’s shareholder nod ends the five-year wait.
The special resolution passed entailed the conversion at Rs. 22.50 per ordinary voting share. The price was revised in July last year from Rs. 15.26 previously. Share price of Galadari yesterday moved up by 20 cents to Rs. 12.30 after hitting a peak of Rs. 12.70.
The conversion would involve issuance of 318.395 million new shares to Galadari Brothers Company (LLC).
The current stated capital of Galadari Hotels is Rs. 1.824 billion comprising 182.434 million shares.
The loan balances were as at June 2012. The other creditor, the National Insurance Trust Fund to which Rs. 596 million is due, has not accepted the debt to equity conversion proposal.
There are around eight Galadari Brothers and related parties holding a stake of approximately 36% stake in Galadari Hotels. Iceberg 2 Ltd. holds a 16% stake whilst EPF owns a 13% stake.
As at June 2012, accumulated losses at Galadari amounted to Rs. 9.69 billion, up from Rs. 8.9 billion a year earlier. As at end 2012, the figure was Rs. 9.18 billion.
For the year ended 31 December 2012, Galadari Hotels posted a loss of Rs. 437 million, as against a loss of Rs. 266 million in the previous year. The loss was despite Rs. 209 million net profit posted in the fourth quarter of 2012.