LNP – Renuka Holdings taps Rs.1bn in shareholder funds digitally

Renuka Holding PLC (RHL) has announced plans to raise Rs.1.031 billion via a rights issue closing on the December 16 to carry out debt settlements and to fund future investments into group subsidiaries, according to a circular issued to its shareholders.

According to the circular, the new ordinary voting shares will be issued at a price of Rs.14 amounting to Rs.934, 863,56. The non-voting shares will be issued at a price of Rs.10 amounting Rs.96, 426,220.Â

The total proceeds expected to be raised through the rights issue is Rs.1,031,289,78.Â

Renuka Holdings PLC ordinary share price closed at Rs. 15.20 yesterday and its net asset value per share as at September 30, 2020 was Rs.62.87.

For the six months ended September, 30 2020, the group recorded turnover of Rs.4.2 billion, a net profit of Rs.208 million and equity attributable to shareholders ofÂ
Rs.6.4 billion. Â

The group consists of two main verticals – food and beverage, and property and investment. Renuka Holdings’ interest in this sector is owned through Renuka Foods PLC, which consists of agribusiness via Renuka Agri Foods PLC and Renuka Agri Organics Ltd, Renuka Teas Ceylon Ltd and Kandy Plantations Ltd.

The FMCG business is led by Richlife Dairies Ltd. and Shaw Wallace Ceylon, the owner of the leading brands of canned fish, snacks, among other brands. Â

In the property and investment sector, the ongoing construction of its flagship development ‘Galle Face Icon’ is progressing well with all piling work complete and excavation ongoing by Sanken. The construction will be above ground by April 2021.Â

Once completed, it will be a 32-storey tower situated in the Galle Face district of Colombo 03, consisting of a total construction area of 450,000 sq ft, with vistas over Galle Face Green and the new Port City. The group also draws income from operating Baseline Business Center and other group lands.Â

On the investment side, the group set up a dedicated listed entity in 2016, Renuka Capital PLC, which just sold its maiden significant investment in On’ally Holdings PLC (Unity Plaza) at more than triple its original investment cost.       Â
The rights issue is being carried out on a digital platform in light of the impact of COVID-19 on the postal services, since there is a practical difficulty in dispatching the provisional letter of allotment to shareholders of the company within the stipulated time frame.Â

However, the Colombo Stock Exchange has facilitated for eligible shareholders to apply for their rights entitlement via CDS (for CDS account holders).Â

All eligible shareholders of the company, both CDS and Non CDS, are encouraged to follow the procedure set out and upload to the website www.cse.lk and www.cds.lk/renuka-holdings-plc-right-issues  prior to applying to the rights issue. If any shareholder is unsure, they can contact Kasun on 070 4375 236.

The directors of the company are I.R. Rajiyah, Dr. S.R. Rajiyah, S.V. Rajiyah, L.M. Abeywickrama, S. Dominic, T.K. Bandaranayake, J.M. Swaminathan, A.L. Rajiyah, V. Sanmugam and J. J. B. A. Rajiyah.