Free Lanka Capital Holdings - Private placement?

cse.alpha · 1 Free Lanka Capital Holdings - Private placement? Fri Mar 11, 2011 1:14 pm

cse.alpha

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Free Lanka Capital Holdings - Private placement?

Free Lanka Capital Holdings (FLCH) is supposed to have a done private placement of its shares during past 2-3 months, with promoters selling shares to selected outsiders. John Keells Stock Brokers have been involved in marketing shares apparently. Can't find details of this transaction in Prospectus though, maybe as there was no new issue of shares.

As at 31st March 2010, Browns Investments and Perpetual Capital held 50% each of FLCH, as shown on page 110 of Prospectus. This is now no longer the case as seen by major shareholder list on page 16 of Prospectus - the promoters have reduced their stakes.

Some Directors have bought shares at SLRs 4-70 per share on 30th December 2010 as shown on page 41 of Prospectus, at a discount to the SLRs 5 IPO price.

Does any one know if the discounted SLRs 4-70 is the price at which private placement was also done? Is there any minimum holding period of these private placement people?

The authorities really should try to ensure that all these details are disclosed in Prospectus.

mark · 2 Re: Free Lanka Capital Holdings - Private placement? Fri Mar 11, 2011 1:57 pm

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"Does any one know if the discounted SLRs 4-70 is the price at which private placement was also done? Is there any minimum holding period of these private placement people?"

*private placement means-The sale of securities directly to an institutional investor, such as a bank, mutual fund, insurance company, pension fund, or foundation. Does not require SEC registration, provided the securities are bought for investment purposes rather than resale, as specified in the investment letter.

*Unlike a public offering, a private placement does not have to be registered with the Securities and Exchange Commission (SEC), provided the securities are bought for investment and not for resale.(don't know about the minimum holding period)

*Advantages
--companies get to control the process and work directly with veteran investors who have deep expertise in the company, its industry, and in understanding growth potential. That allows the management team to stay focused on core business objectives instead of managing a volatile public offering to jittery investors.

--A private placement may also enable a small business owner to hand-pick investors with compatible goals and interests. Since the investors are likely to be sophisticated business people, it may be possible for the company to structure more complex and confidential transactions. If the investors are themselves entrepreneurs, they may be able to offer valuable assistance to the company's management. Finally, unlike public stock offerings, private placements enable small businesses to maintain their private status.

--do not require the assistance of brokers or underwriters, they are considerably less expensive and time consuming.

*read this
http://www.oneminuteu.com/default.taf?page=content&id=2505

milanka · 3 Lock in Rule. Fri Mar 11, 2011 2:43 pm

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mark wrote:"Does any one know if the discounted SLRs 4-70 is the price at which private placement was also done? Is there any minimum holding period of these private placement people?"

Refer here about the lock in rule .
http://forum.srilankaequity.com/t477-lock-in-rule-for-private-equity-by-sec?highlight=lock

Since the PP share purchase done last yr december this rule will not apply.

Thanks for highlighting the news from the Prospectus.

milanka · 4 Re: Free Lanka Capital Holdings - Private placement? Fri Mar 11, 2011 2:54 pm

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http://www.lbr.lk/fullstory.php?nid=201102251918584343

Infor on PP found .

Academic · 5 Re: Free Lanka Capital Holdings - Private placement? Sat Mar 12, 2011 12:46 pm

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It is great that both Alpha and Milanka brought this matter out.

See, the prospectus is dated 1st February. So if there was a private placement end January which is not allocated by 1st February then the private placement is not "officially" part of equity.

Union Bank had such a placement and they promptly disclosed it in the prospectus.

If 1.1 billion PP @ 4.7 (?) is taken to analysis. The stated annualized EPS and NAVPS becomes Rs 0.40 and 4.46 respectively.

Directors purchase on page 41 seems to be from existing shares (from other shareholders) not a new issue, I guess as Changes in Equity doesn't show new issue.

However, note that the core competence of the business seems to be plantation and "Capital" part of the name has come after recent renaming.

Paypal · 6 Re: Free Lanka Capital Holdings - Private placement? Sun Mar 13, 2011 7:59 pm

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Academic wrote:
It is great that both Alpha and Milanka brought this matter out.

See, the prospectus is dated 1st February. So if there was a private placement end January which is not allocated by 1st February then the private placement is not "officially" part of equity.

Union Bank had such a placement and they promptly disclosed it in the prospectus.

If 1.1 billion PP @ 4.7 (?) is taken to analysis. The stated annualized EPS and NAVPS becomes Rs 0.40 and 4.46 respectively.

Directors purchase on page 41 seems to be from existing shares (from other shareholders) not a new issue, I guess as Changes in Equity doesn't show new issue.

However, note that the core competence of the business seems to be plantation and "Capital" part of the name has come after recent renaming.