DFCC Bank to raise Rs 3 billion through rights issue

DFCC Bank is planning to raise Rs 3 billion from a rights isssue, the first since 1993, as new equity capital to support the bank's business expansion plans.

The new capital is also to maintain prudential ratios including the additional regulatory capital requirements arising from the scheduled introduction of Basle 2 Capital accord in 2008 whilst participating in the rights issue of the bank's associate company, Commercial Bank of Ceylon Ltd.

In a statement, the Board of Directors decided to declare an interim dividend of 45% to its shareholders for the financial year 2006/2007.

The bank said that the directors also decided to recommend to shareholders the issue of one share for every four shares held at the price of Rs140/- per share (par value Rs10/-) and also to issue one bonus share for every five shares held by the shareholders on the increased share capital after the rights issue.

The rights and bonus shares will not be eligible for the interim dividend. “The issue of Rights and Bonus shares will be subject to the approval of shareholders to be obtained at an extraordinary general meeting on a date to be advised in due course and of the Colombo Stock Exchange,” the statement added.