Utilizing a part of an Rs.4.2 billion rights issue, Sri Lankan developer, Overseas Realty (Ceylon) Ltd (ORCL), a unit of Singapore's Shing Kwan group, will soon begin work on the second phase of the Havelock City, a commercial complex including a retail mall estimated to cost Rs. 8 billion.
This complex will be built in a 400,000 square feet area which is seven times bigger than Majestic City, ORCL CEO, W. Don Barnabas said. The company this week said it was raising Rs.4.2 billion in a 1-for-2 rights issue at Rs 15 a share by issuing 281 million shares. The issue is for the compulsory redemption of non-convertible cumulative redeemable preference shares issued to Shing Kwan Investment (Singapore), part of the Shing Kwan group, its main shareholder, and to meet working capital needs of planned projects.
 The money will not be used to repay the shareholders loan taken from the parent company in Singapore, for the first phase of the Havelock City project comprising two residential towers of 226 units, covered parking for 520 vehicles and approximately two acres of landscaped gardens, he added. Around 65% of apartments in the first two towers have been sold. "Revenue from apartment sales in 2009 was Rs.1.2 billion, a 106% increase over the previous year," he said. The majority of buyers are locals and Sri Lankan expatriates from UK, USA and European countries. A British couple was among some overseas buyers who expressed keenness to invest in Sri Lankan property. Havelock City is on 18 acres of prime land in Colombo.
Mr. Barnabas noted that the rights issue was ratified by the overseas directors of the company who visited the island last week. He revealed that directors of Shing Kwan Investment expressed willingness to invest in Havelock city commercial complex project and several other property development projects in the city of Colombo as Sri Lanka's property market is recovering after the war. He pointed out that sales of new apartments in the project and occupancy at its existing World Trade Center (WTC) building have begun to pick up after slumping last year owing to global recession and ethnic strife. He declined to comment on the recent decision by ORCL Managing Director Thilan Wijesinghe to resign from the company. |
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