The Company is issuing 30 million rated, senior, unsecured, redeemable debentures at Rs. 100 each and in the event of an oversubscription will offer a further 20 million debentures.
The issue has four types of debentures. Type A is five year tenor and carries 10.25% interest rate per annum payable semi annually with an Annual Effective Rate (AER) of 10.51%. Type B is six years with an interest rate of 10.45% per annum payable semi annually with AER being 10.72%.
Type C is seven year tenor with 10.72% interest rate per annum payable semi annually with an AER of 11.01%. Type D is eight years with 10.95% per annum payable semi annually with an AER of 11.25%.
ICRA Lanka Ltd., a wholly owned subsidiary of ICRA Ltd, a group company of Moody’s Investors Service has assigned [SL] A+ rating for the debentures.
Manager to the issue is NDB Investment Bank Ltd., and registrars are PW Corporate Secretarial Ltd. Trustee to the issue is Bank of Ceylon.
AEL proposes to utilise the entirety of the funds raised through the Issue to part finance two on-going projects undertaken by the Company.
One is the construction of Access Tower II at Union Place Colombo 2 for which Rs. 2.57 billion will be utilised and balance Rs. 2.4 billion on Urban Regeneration Project – Design and Construction of 941 housing units at Henamulla, Colombo 15.
Any additional investments on these projects will be financed by internally generated funds of the Company.
Access Tower II, which is the second stage development and expansion of the existing iconic
Access Tower I, is a 29 storeyed state-of-the-art modern office complex currently under development at Union Place, Colombo 2 alongside the Access Tower I.
The project is coming under Access Realties 2 Ltd., which is a fully owned subsidiary of Access Realties Private Limited which in turn is a fully owned subsidiary of AEL. Access Realties Ltd. is a BOI approved private limited company incorporated on 11 March 1994 with an objective of developing and managing high rise buildings. Access Realties Ltd. currently owns and manages Access Tower I, a twelve story office complex in the heart of Colombo. Access Realties 2 Ltd was incorporated on 18 March 2013 as a private limited company to own and manage the proposed Access Tower II.
The project undertaken by Access Realties 2 Ltd. is estimated to cost approximately Rs. 3 billion. The funding requirement of the project will be met by AEL via an equity infusion into Access Realties Ltd. which will in turn be invested in the equity capital of Access Realties 2 Ltd.
Out of the proposed infusion of Rs. 3 billion by AEL into Access Realties 2 Ltd., Rs. 2.58 billion will be funded through the proceeds raised via the Debenture Issue. The remainder of Rs. 458 million will be funded through internally generated funds of AEL also financed as equity in to Access Realties 2 Ltd. via Access Realties Ltd.