The Environmental Resources and Investments Plc (ERI) rights issue announced in the Colombo Stock Exchange on Tuesday, will be mostly bought by the company's major shareholder, Lionhart Investments, a source close to ERI, said.
"Lionhart has been buying the ERI shares at Rs 20 and will continue to support this price," the source told The Sunday Times FT. In May last year ERI said that it will not proceed with the rights issue which they announced early that year to raise over Rs.4 billion, due to the unstable country situation, after its major shareholder Lionhart shot it down at the company’s Extra Ordinary General Meeting (EGM) held in April 2008. At the time the resolution to not forge ahead with the rights issue was passed by a 76.54 % role with the majority votes coming from Lionhart.
When queried about this, the source said that Lionhart now sees that the war is about to finish and that it does not make sense to be ‘stagnant’. “This rights issue will introduce a little bit of money into the company and get things moving,” he added.
Kosala Heengama, Director ERI, told The Sunday Times FT that under the rights issue of 1:1 at Rs. 20 they plan to raise Rs. 350 million, to fund the investments ‘we were planning to do when the application gets sanctioned by the CSE’. “We want to invest in all listed and unlisted entities as and when the opportunities arise – especially at this time," he said.
He said the activity seen in the ERI share during the past few days was due to the rights issue announcement, adding that after this there may be about three more such issues during the course of the year.
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