``The rights are trading at a high price and whatever is available is being snapped up,’’ a broker said.
Brokers and analysts said that there had been internal transfers between accounts of rights entitlements by related parties and that at least one significant foreign shareholder has been increasing his stake ex-rights.
``There was an acquisition of five million JKH, ex-rights, last week at a Rs. 218 price by a Malaysian fund which is one of the biggest shareholders of the conglomerate,’’ a well informed source said.
Many shareholders, large and small, are also applying for additional shares that may become available due to a few shareholders not taking up their entitlement. These would include deceased shareholders and those not keeping a track of their holdings, a broker explained.
``It’s not likely that many will become available but we are advising our clients to apply for five or 10 percent of their entitlements as additionals,’’ he said.
JKH Chairman Susantha Ratnayake told shareholders at the recent extraordinary general meeting at which they overwhelmingly endorsed the rights issue that the company was confident of its ability to service dividends at the current level even after the number of shares in issue increases post-rights.
JKH has attached two sets of warrants to the rights shares entitling their subscribers to contribute additional equity to the company down the road.
``That way we reduce the burden of the cash demand on them by making the cash calls only as the project proceeds and we need the money,’’ Ratnayake explained.