Browns to raise Rs.7.1bn via rights to settle debt

The Brown & Company PLC director board has resolved to raise Rs.7.08 billion through a rights issue, subject to the approval of its shareholders and the Colombo Stock Exchange, with regards to the listing of the rights shares. 

The company in a stock exchange filing said it would issue 141.75 million shares in the proportion of two new ordinary voting shares for every one ordinary share held, at an issue price of Rs.50 per share, to raise this money.

The day the rights issue was announced (May 22), the Browns share closed at Rs.69.90, up Rs.1.80. Since then, the share has come down and yesterday it closed at Rs.55.90. The net asset per share of Browns, as at December 31, 2017, was Rs.253.87 at group level, as against Rs.219.55 a year earlier.

The company’s current stated capital is Rs.2 billion, represented by 70.875 million shares.

The company said the rights issue proceeds would be used to settle debts.

At group level, the short-term borrowings stood at Rs.2.6 billion, while the long-term loans and borrowings amounted to Rs.4.7 billion.