SLT to go for private placement to comply with public float rules

• Director board in principle agrees to carry out a private placement 
• Cabinet last week gave nod to use State funds to purchase SLT shares

Sri Lanka Telecom PLC (SLT) is to carry out a private placement of shares to meet the regulatory minimum public shareholding requirement stipulated by the Colombo Stock Exchange listing rules.

The company in a CSE filing said its board of directors had agreed in principle to carry out a private placement to comply with the minimum public float requirement.
The current public float of SLT is 5.52 percent.

Last week, Cabinet nod was given for State-run pension funds and banks to buy shares of SLT, of which the government owns little over 54 percent, to help the latter to comply with the 10 percent minimum public float requirement.

The Cabinet of Ministers approved a joint Cabinet paper to this end by Finance Minister Mangala Samaraweera and Telecommunication, Foreign Employment and Sports Minister Harin Fernando this week. 

The Employees’ Provident Fund (EPF), Sri Lanka Insurance Corporation (SLIC), National Savings Bank (NSB), Bank of Ceylon (BOC) and People’s Bank already are among the top 20 SLT shareholders.

As the single largest shareholder, the Treasury Secretary has 49.5 percent stake in SLT, while Global Telecommunications Holdings NV, a unit of Malaysia’s Maxis, has 44.98 percent.
It appears that SLT will issue new equity to State funds under the proposed private placement in line with the recent Cabinet approval.