JKH had been keeping plans for this Beira Lakefront project under wraps for the past several months and made a brief stock exchange filing after Investment Promotion Minister Lakshman Yapa Abeywardene recently indicated that an agreement between JKH and the BOI was imminent.
Lanka Business Online Thursday filed a report quoting BOI chief Lakshman Jayaweera saying that a USD 300 rights issue will be floated internationally by JKH. No sooner this report went on the wire, JKH went on record saying that its board ``had made no decision about a rights issue.’’
Jayaweera made no denial or clarification of the remark attributed to him by LBO leading to speculation that he may have mistakenly used the words ``rights issue’’ instead of ``private placement.’’
LBO said that JKH executives left soon after the signing of the agreement and were not present when the BOI chief talked to reporters. The new service also said that JKH Chairman/CEO Susantha Ratnayake did not take questions put to him at the event.
JKH shareholders believe raising capital abroad by private placement, if the price is right, would benefit all shareholders of the conglomerate where foreign funds are among the biggest shareholders.
Insiders said that JKH wanted to keep its plans under wraps until all regulatory approvals were in place. There was speculation that the group was looking at a casino licence but the company was tight-lipped on this subject which was not mentioned in its stock exchange filing on the project.
It is widely expected that a casino will be part of the mixed development strategic investment which includes a 500-room luxury hotel.
The last rights issue of JKH which was fully subscribed was pricey leading to suspicion of an effort to dilute some large shareholders. But these shareholders took up their rights and additionals although it was unclear whether they had judged the market right.
The recent bull run on the CSE followed by bearish sentiments was largely attributed to the up and down movement of the JKH share which nudged a 52-week high of nearly Rs. 300 recently largely on foreign demand for the share but later went below Rs. 250 with foreign interest drying up.