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Malwatte Valley to set up Rs.2.8 bn resort in Maldives
MONDAY, 18 JULY 2011
Malwatte Valley Plantations PLC (MAL) recently informed the Colombo Stock Exchange and its shareholders that the company is intending to raise over Rs.606.59 million from a rights issue, to partly finance a hotel project in the Maldives.
Accordingly, the company disclosed that the proposed resort island development include a 4-star comprising of an initial development of 70 bungalows with an estimated outlay of USD 26 million or a Rs.2.8 billion.
“The property is expected to be managed by the Hilton-World Wide Hotel chain with whom a Memorandum of Understanding dated 28 March 2011 has been signed” the company informed the shareholders in a circular adding that this project will be carried through Malwatte Hotels and Resorts (Private) Ltd, incorporated on 14 June 2011 a subsidiary of MAL.
MalwatteValley Plantations (MAL) expects to commence development of the proposed project in September 2011 and complete within two years of commencement. The company expects to utilize the funds raised through the rights issue for the completion of the proposed project and the approximate date of commencement of operations would be September 2013.
The move came to light amid many financial companies that were recently listed in Colombo Bourse and several other largest commercial banks reconsidering their massive rights issues that were launched to raise billions of money from public investors either to make their balance sheets healthy or to settle creditors’ loans. In another development, a unit Lankem Group, Lankem Developments PLC (LDEV) concluded a rights issue that only raised a half of the original value which was Rs.1.3 billion while the company was hoping to raise Rs.2.5 billion.
On June 14, MAL said it is offering a total of 49.51 million voting shares with 2 ordinary voting shares for every 10 voting shares held, and further 2 Non-voting shares for every 10 voting shares held at Rs.6.75 per share.
Further it also said, the company will be offering a total of 49.51 non-voting shares in the proportion of 02 Non-voting shares for every 10 Non-voting shares held and 02 voting shares for every 10 Non-voting shares held as at 5 August 2011. However, the issue is not underwritten, but major shareholders have indicated they would subscribe to their entire entitlement of 63.41% of rights of the company.
According to the capital structure of MHRL, the subsidiary of MAL is expected to be a combination of debt and equity with a ratio of 50:50. Subsequently, the entirety of the debt portion of MHRL would be a loan by MAL amounting to a maximum of USD 13 million or Rs.1.4 billion whilst out of final MHRL equity capital structure, approximately US $ 8 million will be infused by MAL for a stake of approximately 62% of shares of the subsidiary.
The party owning the leasehold right to the proposed project site Trinus-CAE Holdings would own shares to the value of approximately USD 1.3 million or Rs.1.4 billion amounting to approximately 10% of the shares of MHRL, in exchange for the transfer of the said leasehold right.
“The period of the lease is 25 years with an option to renew it for a further 25 years” the statement to CSE noted, adding the remaining period of the original lease is 24 years. It is said that the balance equity of MHRL would be raised via private placement amounting to approximately USD 3.7 million or Rs.400 million (28% of the shares of MHRL) in the future.
The notice also said that another USD 12 million or Rs.1.3 billion is to be raised through debt by MAL from local financial institutions by leveraging its balance sheet to a maximum of 50: 50 between debt and equity, whilst the balance funding of approximately USD 3.5 million or Rs.385 million will be financed through internally generated MAL funds.
(Source : http://print.dailymirror.lk/business/127-local/50302.html)
MONDAY, 18 JULY 2011
Malwatte Valley Plantations PLC (MAL) recently informed the Colombo Stock Exchange and its shareholders that the company is intending to raise over Rs.606.59 million from a rights issue, to partly finance a hotel project in the Maldives.
Accordingly, the company disclosed that the proposed resort island development include a 4-star comprising of an initial development of 70 bungalows with an estimated outlay of USD 26 million or a Rs.2.8 billion.
“The property is expected to be managed by the Hilton-World Wide Hotel chain with whom a Memorandum of Understanding dated 28 March 2011 has been signed” the company informed the shareholders in a circular adding that this project will be carried through Malwatte Hotels and Resorts (Private) Ltd, incorporated on 14 June 2011 a subsidiary of MAL.
MalwatteValley Plantations (MAL) expects to commence development of the proposed project in September 2011 and complete within two years of commencement. The company expects to utilize the funds raised through the rights issue for the completion of the proposed project and the approximate date of commencement of operations would be September 2013.
The move came to light amid many financial companies that were recently listed in Colombo Bourse and several other largest commercial banks reconsidering their massive rights issues that were launched to raise billions of money from public investors either to make their balance sheets healthy or to settle creditors’ loans. In another development, a unit Lankem Group, Lankem Developments PLC (LDEV) concluded a rights issue that only raised a half of the original value which was Rs.1.3 billion while the company was hoping to raise Rs.2.5 billion.
On June 14, MAL said it is offering a total of 49.51 million voting shares with 2 ordinary voting shares for every 10 voting shares held, and further 2 Non-voting shares for every 10 voting shares held at Rs.6.75 per share.
Further it also said, the company will be offering a total of 49.51 non-voting shares in the proportion of 02 Non-voting shares for every 10 Non-voting shares held and 02 voting shares for every 10 Non-voting shares held as at 5 August 2011. However, the issue is not underwritten, but major shareholders have indicated they would subscribe to their entire entitlement of 63.41% of rights of the company.
According to the capital structure of MHRL, the subsidiary of MAL is expected to be a combination of debt and equity with a ratio of 50:50. Subsequently, the entirety of the debt portion of MHRL would be a loan by MAL amounting to a maximum of USD 13 million or Rs.1.4 billion whilst out of final MHRL equity capital structure, approximately US $ 8 million will be infused by MAL for a stake of approximately 62% of shares of the subsidiary.
The party owning the leasehold right to the proposed project site Trinus-CAE Holdings would own shares to the value of approximately USD 1.3 million or Rs.1.4 billion amounting to approximately 10% of the shares of MHRL, in exchange for the transfer of the said leasehold right.
“The period of the lease is 25 years with an option to renew it for a further 25 years” the statement to CSE noted, adding the remaining period of the original lease is 24 years. It is said that the balance equity of MHRL would be raised via private placement amounting to approximately USD 3.7 million or Rs.400 million (28% of the shares of MHRL) in the future.
The notice also said that another USD 12 million or Rs.1.3 billion is to be raised through debt by MAL from local financial institutions by leveraging its balance sheet to a maximum of 50: 50 between debt and equity, whilst the balance funding of approximately USD 3.5 million or Rs.385 million will be financed through internally generated MAL funds.
(Source : http://print.dailymirror.lk/business/127-local/50302.html)
