About
Today 09 February 2011, Free Lanka Capital holding Limited published Prospectus and the Application form in Colombo Stock Exchange website.
Free Lanka Capital holding Limited offer for subscription of 300 Million Ordinary Voting shares at the Price of Rs.5.00 each.
The Issue will open at the date of 17th March 2011 and will close 05th April 2011 or on the date the issue is oversubscribed whichever is earlier.
The prospectus says the minimum subscription should be 2000 shares and the excess should multiples of 1000 shares.
The Prospectus will be available at every trading member. The Pan Asian Bank PLC is as a Banker to the company and the Seylan Bank PLC will be Banker to the Offerings.
The Objective of IPO
The Objective of initial public offering is to fulfill the following investments
- New Hydro Projects – Rs.600 Million investment
The Company plans to Invest in 7 new Hydro project investments of Rs.1.20 Billion. The Rs.600 Million will be funded through the IPO and balance will be funded by Banks Borrowing.
- Development of 2 Boutique Style hotels– Rs.250 Million investment
The Development of 2 Boutique Style hotels were jointly undertaken by Free Lanka Capital holding (40%), Sierra Cables PLC (40%) and Pussellawa Plantation Ltd (20%). The 40% investment is value about Rs.250 Million. This project expected to commence work from April 2011 and hotels will expect to commence their Commercial operation from November 2012.
- Commercial property development Project – Rs.600 Million investment
The Project of development of Commercial Building complex in Borrella with 80,000 Sq.ft. estimated cost as Rs.800 Million, the Rs.600 Million will be funded by IPO and balance will be funded via per sales or Bank borrowings.
The Balance Rs.50 Million will be use for the future development projects undertaken by the company.
The Allotment of share
The Free Lanka Capital holding Limited shares are allotted as following categories,
| Category | No of shares | Percentage |
| Retail Investor | 150,000,000 | 50% |
| Non-Retail Investor | 150,000,000 | 50% |
| 300,000,000 | 100% |
Categories as
Retail Investors – the investor who applied up to 10,000 shares will consider as Retail investor.
Non-Retail Investors – the investor who applied excess of 10,000 shares will consider as Retail investor
My personal View
As per I see the prospectus I personally believe the Free Lanka Capital holding Limited looking forward a development and investments. In mostly the IPOs target to settle the Bank loans and generating the Gearing benefits,
But the Free Lanka Capital holding Limited is looking as attractive investors and this IPO will be suited for the investors who looking for long term developments and risk taking investors. Cause the Free Lanka Capital holding Limited may look for further bank loan feather to generate the investment to fulfill.
Therefore I strongly believe the Free Lanka Capital holding Limited will be suited for the long term investor than the short term investor.
Free Lanka Capital holding Limited Prospectus: http://www.cse.lk/270808/pdf/FLC_Prospectus.pdf
Free Lanka Capital holding Limited Application Form: http://www.cse.lk/270808/pdf/FLC_Application.pdf
Articles of Association: http://www.cse.lk/270808/pdf/FLC_Articles.pdf
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