Softlogic announces plans to raise Rs.7bn via private placement, rights

Diversified conglomerate Softlogic Holdings PLC with interests in retail, ICT, healthcare and financial services, automobile and leisure, yesterday announced plans to raise little over Rs.7 billion via a private placement and a rights issue to restructure the company balance sheet and improve its key capital ratios.

Softlogic Holdings said it entered into a private placement deal with Samena Ceylon Holdings Limited, a fully-owned subsidiary of Samena Capital, a principal investment group focusing on the Subcontinent, Middle East, Asia and North Africa, to raise Rs.3.11 billion for the company, to be utilized to settle short-term debt. 

Accordingly, 182.7 million ordinary shares will be issued to Samena Ceylon Holdings at a price of Rs.17 per share. Subsequently, Samena Ceylon Holdings will hold 19 percent of Softlogic Holdings.
Meanwhile, a further issue of 230.81 million shares by way of a rights issue in the proportion of 24:100 at Rs.17 per share will be made to raise Rs.3.9 billion.

Softlogic Holdings’ present stated capital stands at Rs.5,089 million with 779 million shares in issue. Subsequent to the private placement and rights issue, the stated capital would rise to Rs.12,119 million with 1,192.5 million shares. Softlogic Holdings PLC has been investing in strategic CAPEX projects with a long-term view. 

A company statement said this fundraising exercise, which raises over Rs.7 billion, will help Softlogic to rectify the funding mismatch and in turn, boost profitability with noticeable saving in finance costs when equity replaces debt.

Commenting on this strategic decision, Softlogic Group Chairman/Managing Director Ashok Pathirage said, “Samena brings in a wealth of global business expertise and access to quality financing. With this equity infusion, Softlogic’s financial position will be strengthened, propelling a strong bottom line and supporting medium-term investments.” 

Samena Capital Founder and Vice Chairman Shirish Saraf said, “We are delighted about our first investment in Sri Lanka and to partner with Ashok Pathirage in Softlogic Holdings. 

We strongly believe Sri Lanka is one of the most exciting markets in the Samena region and our investment reflects our confidence in the Softlogic group. We see multiple growth drivers for each of the businesses and look forward to actively supporting the Softlogic team in their endeavour of building a truly world-class enterprise.”

Samena Capital has raised more than US $ 1.5 billion of capital since 2008 and has returned US $ 615 million to investors from over 45 full and partial exits. 

The investment group currently manages total capital of approximately US $ 1.0 billion across three primary investment strategies: private equity, direct investments and credit.

This will be Samena Capital’s first investment in Sri Lanka and its fourth investment in the Asian region within the past six months. 

This fundraising exercise is subject to regulatory approvals and shareholder approval at a General Meeting.