CSE pauses LTL’s Rs.20bn IPO

• IPO was to open yesterday
• CSE issues notice on opening day to not proceed with IPO
• Market regulator says requires LTL to provide additional information for review

The Rs.20 billion initial public offering (IPO) of LTL Holdings Ltd, which was scheduled to be opened yesterday, was postponed, as the Colombo Stock Exchange (CSE) sought further clarification to review the fresh information submitted by the company on the legal matters. 
This is likely to be on the two recently filed fundamental rights (FR) applications in the Supreme Court, in which the company has been made a respondent and still waiting for official notices from the Supreme Court.
In a circular yesterday, the CSE announced that the board of directors of the CSE had instructed LTL not to proceed with the opening of the IPO on Friday (yesterday), as scheduled.
“Certain new information has been brought to the notice of the CSE, relating to the captioned matter on September 10, 2024. In this regard, the CSE has required LTL to provide additional information and clarifications to the CSE for review.  
In view of the aforesaid new information, the board of directors of the CSE noted that such information should have been disclosed in the prospectus by LTL,” the CSE elaborated.
On September 8, 2024, LTL amended the prospectus, with the inclusion of several additional disclosures, after the CSE requested to disclose the details of the legal cases in a letter dated September 7.
In the disclosures, the company acknowledged that it has been made a respondent in two FR applications filed on July 11 and September 5, this year. However, it emphasised that it was yet to receive formal notice from the Supreme Court in both instances.
“The company confirms that it has no knowledge of any other litigation filed against the company,” LTL stated.
In the most recent FR application, the CSE has also been named as a respondent and the CSE has forwarded a copy of the petition to the company.
“(the company) would take appropriate action in terms of the law to address any issues raised in the case and defend itself,” LTL stated. In addition, the company was named as a respondent in three ongoing as well as the withdrawn legal cases filed by third parties in respect of the company and/or its subsidiaries and/or existing shareholders of LTL Holdings Limited (excluding the Ceylon Electricity Board).
However, LTL stressed that there was no significant impact on the company’s financial position or profitability arising from this litigation. 
It was not whether LTL has obtained the information sought by the CSE as of yesterday evening. Despite repeated attempts, LTL officials were not immediately available to comment on the matter.
LTLs announced Rs.20 billion is the largest IPO on the CSE up to date.
The IPO is an offer for the subscription of up to 1.38 billion new ordinary voting shares, at an issue price of Rs.14.50 per share, via an initial issue of Rs.16 billion, with a greenshoe option to increase the total to Rs.20 billion 
through the IPO. 
At the time of the official launch, LTL had already secured commitments from several strategic investors covering over 70 percent of the total issue. The IPO was originally scheduled to be opened on September 10, 2024. 
(NF)