ERI will not proceed with rights

Environment Resource Investments Plc (ERI) is abandoning a planned rights issue to raise over Rs.4 billion due to the unstable country situation after major shareholders led by its main stakeholder Lionhart Investment Ltd backed a resolution not to proceed with the issue.

The resolution seeking the approval of the shareholders not to proceed with the right issue came up at the company’s Extra Ordinary General Meeting (EGM) on Monday. However ERI pledged Rs.25 billion investment during the next two years into the country in a new strategy which they announced recently, according to top officials.

“The resolution not to forge ahead with the rights issue was passed with 76.54 percent with the majority votes coming from Lionhart,” Kosala Heengama, Director, ERI told The Sunday Times FT. Some shareholders present at the EGM raised questions as to why the issue was announced in the first place if the company decided not to go ahead with it, to which Heengama explained that the major investor of the company has decided to invest in the company during the next two years in ‘Classes of Shares’, which are to yet to be approved by the Securities and Exchange Commission (SEC).

Heengama said that things have changed rapidly since ERI announced the issue some months ago and the company does not want to invest ‘all at once’. “Had ERI proceeded with the rights issue, they would have had to go ahead with it within about a month’s time, as per the rules. But without the issue they want to invest Rs.25 billion during the next two years,” he added.

“With the introduction of the new Companies’ Act, a company can categorise its shares, land, buildings or other companies it owns for an example, into different classes, such as class A, class B or class C and list those particular classes in the CSE”.