Prime Lands owned registered finance company Prime Finance PLC informed to Colombo Stock Exchange in filing that the company’s Board of Directors had resolved on 29^th March 2018 to issue 43.2 million ordinary voting shares by way of a Rights Issue in the proportion 6 new ordinary voting shares for every 5 ordinary voting shares. Accordingly the rights will be issued at Rs. 20 per share to raise 864 million in total.

In the disclosure company further added that the funds are raised to fulfill the Core Capital Requirements according to the Finance Business Act direction (Minimum Core Capital ) No. 02 of 2017 dated 23 February 2017 issued by the Monetary Board of the financial regulator – Central Bank of Sri Lanka (CBSL). According to the directive licensed finance companies are rquired to maintain an unimpaired core capital of Rs. 1,000 million (Rs. 1 Billion) by 1st January 2018 and thereafter enhancing it to Rs .1500 million by 1st January 2019, and further Rs. 2,000 million by 1st January 2020 to Rs. 2,500 million by 1st January 2021.

The filing added that as at 31st December 2017 the Core Capital of the company was Rs. 546 million, which was below the core capital requirement of Rs. 1,000 million by 1st January 2018 for which through their letter dated 24th January 2018 CBSL granted an extension up to 30th June 2018 to meet the requirement. Post rights issue the stated capital of the company which is currently at Rs. 508.5 million represented by 36 million ordinary voting shares will be increased to Rs. 1.37 billion represented by 79.2 million shares.

The disclosure further said that majority of the funds raised will be used to enhance loan portfolio via disbursements, and that the rights issue is subject to approval of the shareholders at an Extraordinary General Meeting (EGM) and the entitlement day for the rights will be the end of the trading day of the 18^th June 2018.