The Board of Directors at Lanka Walltiles PLC (LWL) has made a formal decision to merge its fully-owned subsidiary, Vallibel Plantation Management Limited, into the parent company. This merger is set to take place immediately after the completion of a planned Rights Issue.
In a statement released to the Colombo Stock Exchange (CSE) by P W Corporate Secretarial (Pvt) Ltd, the corporate secretaries for LWL, it was confirmed that Lanka Walltiles PLC will continue as the surviving entity once the merger is finalized. However, the amalgamation is contingent upon the company successfully passing a statutory solvency test right after the merger is implemented.
Before moving forward with the merger, Lanka Walltiles PLC intends to raise significant capital through a Rights Issue, offering 128,470,588 Ordinary Voting Shares at a price of Rs. 39 per share, which is expected to generate approximately Rs. 5,010,352,932.
Details regarding the Rights Issue are as follows:
- Entitlement Ratio: Shareholders will receive 8 new Ordinary Voting Shares for every 17 shares they currently own.
- Existing Shareholding Base: A total of 273,000,000 ordinary voting shares.
- Current Stated Capital: LKR 787,765,000.00.
- Regulatory Approvals: The issuance is subject to receiving approval in principle from the CSE and obtaining shareholder consent at an upcoming Extraordinary General Meeting (EGM).
This capital increase aims to enhance the company’s financial stability prior to the merger with its subsidiary. Funds raised through the Rights Issue will primarily be used to reduce existing bank debt and pay off overdue inter-company trade and other interest-bearing payables, thereby significantly bolstering the financial standing and capital framework of Lanka Walltiles PLC.
