Proposed ADB’s $50 mln investment sets off new chapter of growth for HNB
View(s):HNB PLC recently announced that its Board of Directors has granted the Asian Development Bank (ADB) approval to purchase a substantial equity stake in the bank by way of a fresh issue of shares. Upon securing regulatory approval and shareholder consent at an Extraordinary General Meeting (EGM), to be held next week, the bank will issue new ordinary voting shares worth US$ 50 million, thereby enabling ADB take up to 9.9 per cent equity stake in the bank with the valuation of each share being based on the 30-day average trading price immediately preceding the EGM but restricted to a price band between Rs. 190 – Rs. 220. A bank media release said that HNB’s breakthrough partnership with the ADB is anticipated to open up new business opportunities across multiple areas including SME, Microfinance, project finance and renewable energy. “Fueled by this fresh infusion of capital and guided by the ADB’s own extensive technical expertise, HNB aims to further strengthen its systems and processes.
As recently outlined by the MD/CEO of HNB Jonathan Alles, HNB is on its way on an extensive digital transformation journey. The technical assistance that would be available through this strategic investment will power a complete transformational process within the organization in order to further augment HNB’s position in the digital space. HNB will also be in a position to harness technical expertise to further refine its stringent risk management framework and drive continuous process improvement,” the release said. The ADB will also provide HNB with access to a wealth of knowledge on world class governance standards, corporate social responsibility and sustainable banking practices which HNB aims to integrate into its own business model, risk management framework and governance practices going forward.
| Court order bars HNB EGM The Commercial High Court on Thursday barred the HNB (via an interim injunction) from holding an Extraordinary General Meeting (EGM) aimed at passing a resolution to permit the issue of shares to the ADB, until an application opposing the move is heard. The EGM was due to be held on October 26. The petitioner in this case is Stassen Exports. The total stake owned in HNB by the Harry Jayawardena-led group through Milford Exports (Ceylon) Ltd, Stassen Exports and Distilleries Company of Sri Lanka is 17.75 per cent with voting rights restricted to 10 per cent.
| |