Malaysia Telekom positive in raising Rs. 15 billion from rights
INVESTMENT: Malaysia Telekom (MT), the holding company of Dialog
Telekom (DT), is positive about investing in Sri Lanka and has already
assured to participate in the countryâ€™s largest rights issue to raise Rs
15 billion, company sources said.
MT has an 87 per cent shareholding of Dialog and will make maximum
use of this rights issue. They expect to purchase Rs 13 billion worth of
shares from it, Dialogâ€™s Head of Finance and Internet Base, Tivanka
The company expects many foreign shareholders to take this issue in
the right spirit and will obviously aid to improve the foreign investor
sentiment in the country, Ranagala said.
This is the single largest rights issue a company will undertake in
the Sri Lanka market, which is expected to raise Rs 15 billion for a
major capital infrastructure development programme, he said.
From this issue the company would be able to admix equity and debt
ratios in a balanced manner in their future expansion programmes,
without exhausting their cash flow, he said.
This rights issue will be open till May 21 and the company has
adopted a formula of 1:10 which could be exercised from after May 22.The
bulk of the money that is expected to be raised from the rights issue
will be for the improvement of GSM and voice businesses. They will also
use part of it for the improvement of their band width of the network
and media business.
Under the rights issue shareholders would get the privilege of
purchasing shares for less than the market prices. The reason for the
company to going for a right issue is that Dialog shares are heavily
traded in the Colombo Stock Market and most foreign buyers are
interested in buying its shares in chunks.
Further, it is also determined to increase the liquidity in the
market and to offer an option for large shareholders to pick up shares
of the company to enlarge the portfolio, sources said.
The number of Dialog shares traded in the Colombo Stock Exchange (CSE)
are not ample enough due to the low volume in the market and it prompted
the company to go for the biggest right issue, sources said. The company
has already informed the CSE and it is following certain procedures
imposed by various institutes.
The company expects that many foreign investors and institutional
buyers would take this rights issue and which is some sort of a reward
for the existing shareholders to purchase Dialog shares less than for
the market value.