Financial Times

Heavy foreign interest in LIOC share issue
Receiving more than 37,000 applications with over subscriptions amounting to almost 10 times the issue, the initial public offering of the Lanka Indian Oil Company was a massive success.

"I am very happy," an overjoyed Mahadevan Nageswaran, LIOC Managing Director, told The Sunday Times FT. "We managed to draw investors from all corners of Sri Lanka from Jaffna to Matara.”

"Of the 46 foreign investors we have drawn, twenty are investors who have never invested in the country before. This proves the confidence investors have in us - both local and foreign - and also would silence the critics."

Nageswaran rejected rumours in the market that LIOC was under government pressure to give preference to foreign institutional investors in the share allotments because of its desperate need for foreign exchange and fast depleting reserves.

"We'll give first preference to Sri Lankan retail investors as we said in our prospectus," he said. "After satisfying retail investors, then it will be at the discretion of the board to decide the allotments.”

"It would be good for us to give shares to foreign institutions as Sri Lanka needs foreign exchange. But there is no government pressure on us, I can assure you. The government has always been good to us."

Nageswaran said the LIOC board would meet in Colombo on Tuesday or Wednesday to decide on the allotments. Having received applications amounting to US$ 97million, success of this magnitude had been unprecedented, market analysts said.

There were fears of the Sri Lankan call money market crashing owing to the huge volumes of money being paid on this behalf.

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