Opportunity Sri Lanka | » Sri Lanka’s Citrus Leisure Group Rs. 3.1 billion Rights Issues draw Rs. 3.5 billion demand
Sri Lanka’s Citrus Leisure Group Rs. 3.1 billion Rights Issues draw Rs. 3.5 billion demand

Sri Lanka’s Citrus Leisure Group Rs. 3.1 billion Rights Issues draw Rs. 3.5 billion demand


Daily FT: Citrus Leisure Group hotels three individual Rights Issues aimed at raising Rs. 3.1 billion had drawn applications worth Rs. 3.5 billion reflecting good demand including from minority shareholders.
In January Citrus Leisure PLC announced a Rights Issue of 143 new shares for every 101 existing Shares or 378,354,954 shares at Rs. 4.20 per share thereby raising Rs. 1.58 billion.
Hikkaduwa Beach Resort Plc announced a Rights Issue of 19 new Shares for every 21 existing Ordinary Shares or 257,765,177 shares at Rs. 350 per share aimed at raising Rs. 902 million.
Waskaduwa Beach Resort PLC announced a Rights Issue of 35 new shares for every 52 existing ordinary shares or 376,826,892 shares at Rs. 1.80 per share aimed at raising Rs. 678.3 million.
The purpose for Rights Issues was to settle outstanding related party loans of the respective companies. All issues were underwritten by the main shareholders of the three entities.
Following successful conclusion, Citrus Leisure Rights Issue of Rs. 1.589 billion (378.35 million shares) had drawn 695 applications worth Rs. 1.76 billion reflecting an oversubscription by Rs. 178.6 million.
Hikkaduwa Beach Resort’s Rs. 902.18 million Rights Issue (257.76 million shares) had drawn 545 applications worth Rs. 1.035 billion reflecting an oversubscription by Rs. 133.5 million.
Waskaduwa Beach Resort PLC Rights Issue worth Rs. 678.3 million (376.8 million shares) had drawn 842 applications requesting for shares worth Rs. 704.6 million reflecting an oversubscription by Rs. 26.3 million.
George Steuart and Company owns 75% stake in Citrus Leisure along with a related party 3.7%. Citrus Leisure in turns owns 82.86% in Hikkaduwa Beach which in turn owns 82.83% stake in Waskaduwa Beach.

OSL take:
The response to the IPO by Citrus Leisure is indicative of the strength and growth in Sri Lanka’s tourism industry, especially in the leisure and hospitality sectors. The growth in the country’s tourism industry has resulted in the growth in business/investment opportunities in the industry. The growing business potential in the tourism industry has also attracted the attention of many foreign businesses in the leisure and hospitality sectors in the country. These foreign businesses are looking at direct engagements in the local tourism industry as well as explore investment opportunities in businesses engaged in the leisure and hospitality sectors. Given the steady growth in Sri Lanka’s tourism industry and the growing business potential, foreign businesses/investors could confidently explore the opportunities in the industry.

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