Financial Times

SMB launches IPO following strong first half profits

The issue will open on August 16 and the prospectus and application forms are available with the stock brokers and SMB branches from August 4

Seylan Merchant Bank (SMB) has launched an initial public offering (IPO) of ordinary non-voting shares following a strong 70 per cent growth in pre-tax profit for the first half of 2006.

The bank is offering 100 million one rupee shares at par, in a move to enlarge its shareholder base and increase its issued share capital.

The issue will open on August 16 and the prospectus and application forms are available with the stock brokers and SMB branches from August 4 onwards, the bank said in a statement.

As a special incentive, original subscribers who invest in the IPO will be entitled to a special interest rate of 6 per cent (annualised effective rate) on the leases they take from SMB, up to the value of their investments, the bank announced this week.

IPO subscribers are entitled for this special incentive within a period of two years, even if they have disposed the shares.

Deputy Chairman of SMB Rohan Senanayake said the Rs 100 million raised from this share issue will bxl adequacy of SMB, in line with prudential norms set out by the Central Bank of Sri Lanka. The minimum subscription for this issue, which would be listed on the main board of the Colombo Stock Exchange (CSE), would be 1,000 shares.

SMB has an authorised share capital of Rs 6,000 million. The company's current issued share capital is Rs 445 million.

SMB has entered into a joint venture agreement with K&N Kenanga, a Malaysian financial conglomerate, to increase the range of financial services it offers in Sri Lanka, backed by the technical expertise and the extensive distribution network of Kenanga.

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