SANASA Development Bank (SDB) has announced plans to raise Rs. 4.5 billion via a Secondary Public Offering (SPO).
The move for a SPO involving 68 million shares with an option to issue a further 20 million shares in the event of an oversubscription of the original amount was first announced in April.
SDB said last week that the SPO will be priced at Rs. 51.50 per share based on the one-month Volume Weighted Average Price (VWAP) as of 20 May i.e. three market days prior to the EGM to be held on 28 May to seek shareholder approval.
Accordingly, the bank intends to raise Rs. 3.5 billion via the initial issue and a further Rs. 1.03 billion in the event of an oversubscription of the initial issue bringing the total to be raised to Rs. 4.532 billion.
Net asset value per share as of 31 March was Rs. 112, up from Rs. 108 by end FY2020. The share price closed at Rs. 53.20 yesterday, up by one rupee or 2%. The current stated capital of SDB is Rs. 7.7 billion represented by 91.57 million ordinary voting shares.
In its April announcement, SDB said considering the expected size of the SPO, the Board shall reserve the right to allow new shares under a preferential basis to identified investor/s and to the existing shareholders in consultation with the Colombo Stock Exchange.
The fresh move follows the first phase of its capital raising exercise in FY2020 via a Rs. 1.5 billion Rights Issue in November 2020.
Funds raised from the SPO will be utilised to further strengthen the equity base of SDB and thereby improve the capital adequacy ratios in line with BASEL III guidelines of the Central Bank and to part finance the growth in the loan portfolio envisaged during FY21 to FY22.
In February this year, SDB announced it is committed to a $ 40 million loan from the US International Development Finance Corporation, the arm of the US Government Development Bank, subject to regulatory approval. Together, they aim to support small and medium enterprises and women entrepreneurs to support private sector investment and economic growth in Sri Lanka.
As of 31 March, SDB had loans and advances worth Rs. 108, up from 1,026 billion as of 31 December 2020 and Rs. 85.8 billion in end 2019.
By 31 March the public shareholding of SDB was 84.72% held by 38,738 shareholders. Senthilverl Holdings is the largest shareholder of SDB with a 12.8% stake, followed by Ayenka Holdings 12.4%, FMO – the Dutch development bank 10%, and IFC 6%.
(FT)