Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.

Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

Submit Post
සිංහල පරිවර්තනය

Display results as :


Rechercher Advanced Search

Latest topics

by ranferdi Today at 1:48 pm

» Gold Price
by suku502 Yesterday at 9:25 pm

» COCR can be attractive
by suku502 Yesterday at 5:24 pm

» COMB.X is in support Level will hit 112 in coming weeks
by suku502 Yesterday at 5:22 pm

» JINS Share Repurchase
by DS Wijesinghe Yesterday at 2:07 pm

by DS Wijesinghe Yesterday at 1:56 pm

» Wiser's TA Chart Room
by wiser Yesterday at 11:54 am

» LDEV / ELPL / UDPL Best Plantation results as of 31/12/17 ?
by glad Yesterday at 6:56 am

» What happened to Janashakhi.... I sold 2 weeks ago. Total gain i lost over 150000
by glad Yesterday at 6:52 am

» What to buy?
by Ryan Hudson Thu Feb 22, 2018 10:19 pm

by wisdom79 Thu Feb 22, 2018 6:23 pm

» Share my Portfolio gain to build morale and confidence over you !!!!
by wiser Thu Feb 22, 2018 4:00 pm

» Sri Lanka records BOP surplus of US$2.05bn in 2017
by DS Wijesinghe Thu Feb 22, 2018 2:06 pm

» Bus-explosion
by samaritan Thu Feb 22, 2018 1:09 pm

» SDB bank would be 120+
by hettdas Thu Feb 22, 2018 9:52 am

» Reason Behind SFS Booooming
by trasantha Thu Feb 22, 2018 8:21 am

» SL Rupee reaches record lows
by Sstar Wed Feb 21, 2018 11:05 pm

» Sri Lanka's ETI affiliate says no approval for investor yet
by Sstar Wed Feb 21, 2018 11:01 pm

» Winds of Change in Sri Lanka
by Sstar Wed Feb 21, 2018 10:55 pm

» Sri Lanka to introduce a new economic plan next week
by Sstar Wed Feb 21, 2018 10:53 pm

Forum Disclaimer

The information contained in this forum have been submitted by third parties directly without any verification by us. The information available in this forum is not researched or purported to be complete description of the subject matter referred to herein. We do not under any circumstances whatsoever guarantee the accuracy and completeness information contained herein. its blogs, forums, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not in any way be responsible or liable for loss or damage which any person or party may sustain or incur by relying on the contents of this report and acting directly or indirectly in any manner whatsoever.

Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility, its blogs, forums, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. The information on this website is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.

You are not connected. Please login or register

Sri Lanka Equity Forum » Expert Chamber » Lankem Development (LDEV) - Rights Issue and its Implications

Lankem Development (LDEV) - Rights Issue and its Implications

Go down  Message [Page 1 of 1]


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
First topic message reminder :

Please see below the implication of the two separate announcement made by Lankem Development (LDEV) in relation to the recent Rights Issue.

Initial Announcement
Rights Issue
22 March 2011
Date of Initial Announcement :- 09-Mar-2011
Proportion:- Fifteen (15) new ordinary shares for every One (01) share held
Issue Price:- Rs.25.00/-
The number of shares to be issued :- 103,500,000 ordinary shares
EGM / Provisional Allotment: 21.Apr.2011
XR: 25-Apr-2011
Dispatch of Provisional Letter of Allotment : 29.Apr.2011
Rights Trading Commences on : 06.May.2011
Renunciation: 13.May.2011
Last Date of Acceptance & Payment: 16.May.2011

Latest Announcement
Rights Issue
07 June 2011
Please note that 53,100,000 Ordinary Shares of the Company were listed on 7th June 2011, pursuant to a 15:1 Rights Issue.

What does this mean?
Carefully read the amounts highlighted in blue. This means that although LDEV planned to issue 103.5mn share by way of a rights issue, only 53.5mn shares were issued and subscribed. The Rights issue was a failure and not fully subscribed.

What are the Implications
a) Share capital my have not got diluted as previously expected.
b) Only few objective of rights issue would have been met. Please read the purpose of the Rights issue.
c)LDEV may have acquired the Agrapatana Plantation from the proceeds of the rights subscription but other plans of Hydro Power and Leisure project may not materialize
d) As the subscription would have predominantly come from Lankem Group Companies, the free float will remain almost the same.
e) LDEV may be renamed as the Agarapatna Plantation and may probably be the only plantation company that may be available at these price levels

Current Share Price offer greater discount than expected. How?
Please see below the two separate calculations for the expected and adjusted theoretical ex-right price of LDEV subsequent to the Rights issue.

Expected Theoretical Ex-rights Price based on full subscription of rights.

Cum Rights Price............... 1 Share = Rs 75
Rights Proportion.............. 15: 1
Proposed Rights................15 Shares at Rs 25 = Rs 375
Ex-Rights.............................16 Shares = Rs 450
Ex-Rights Price........................ Rs 28/- per share

Real Theoretical Ex-Rights Price due to under subscription of rights

Issued Share Capital Prior to the Rights Issue. = 6.9mn Shares
Actual Rights Subscribed = 53.5mn
Actual Rights proportion = 53.5mn shares; 6.9mn shares = 7.75 shares : 1 Share
7.75 Shares@ Rs 25/= ................. Rs 194/=
Cum Rights Price...........................Rs 75/=
Cost of 8.75 shares.........................Rs 269/=
Real Ex-rights Price....................... Rs 31/=

The Market Price of LDEV as at 17th June 2011 was Rs 21/=. Therefore one may consider that LDEV trade at a larger discount to its theoretical valuations.

Last edited by Quibit on Sun Jun 19, 2011 9:02 pm; edited 1 time in total


Vice President - Equity Analytics
Vice President - Equity Analytics
This was trading at Rs.90 before the right issue (when its net asset value was less than Rs.1) and now trading at 19 (when its net asset value is Rs.23). Shouldn't it be the opposite?

May be your facts are right. But how many shares are today selling at below NAV and below IPO price. In the current market, all those fundamental has no value.No one can predict. What happend to VONE? Not as expected by the investors.Isn't it?


Manager - Equity Analytics
Manager - Equity Analytics
Very Happy Very Happy Very Happy Basketball Basketball Basketball


Manager - Equity Analytics
Manager - Equity Analytics
Very Happy Very Happy Very Happy pirat pirat pirat Basketball Basketball Basketball


Manager - Equity Analytics
Manager - Equity Analytics
wait and see


Manager - Equity Analytics
Manager - Equity Analytics
please explain why  LDEV  moving. What is the target price.


Manager - Equity Analytics
Manager - Equity Analytics                                        Check three month  EPS  Rs.1.97 NAV 12.59 Tea price up this period.             
my view u check careful Thanks.


Manager - Equity Analytics
Manager - Equity Analytics
මිල රු. 2.90 - 3.00 අතර තිබියදි හිමිකම් නිකුතුව ගැන සිතමින් සහ ආගරපතන වැවිලි සමාගම මෙහි ප්‍රදාන අයෝජනය වග නොදැන සිටි නවක කොටස් වෙලද පොළේ අයෝජකයන්ට දැන්වත් තමන්ගේ තැරව්කරුවන්ගෙන් මිදි තම දැනුමට අනුව සමාගම් වාර්තා,ලෝක වෙළද පොළේ තේ මිළ වැඩිවීම්,ඉරාක, ඉරාන රටවල් නැවත තේ ම්ළට ගැනීමට පැමිනීම ආදි කරුණු තම දැනුමෙන් අවබෝධ වේවා!.


Manager - Equity Analytics
Manager - Equity Analytics
Very Happy Very Happy Very Happy Very Happy study study study study

Tharu24 +

Stock Trader
Dear Sanjulanka,You are one of very few,who in a selfless manner initimated the huge potential available with LDEV to members.I am sure many would have capitalized.Greatly appreciate the kind acts backed by good intentions.I think all those who are following LDEV should read the post by Quibit way back in 2011,which will give valuable insight in to the true potential with the share.


Manager - Equity Analytics
Manager - Equity Analytics
කොටස් වෙළද පොළේ පොඩි අයෝජකයින්ටත් ලාභ ලබන්ට පුලුවන් අවස්තාවක් ලෙස තේ වතු සමාගම්වල අයෝජනය දක්වන්න පුලුවන්.එයිනුත් හොද අනාගතයක් තියෙන සමාගම්වල අයෝජනය ඉතා වැදගත්.ස්තුතියි.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum