National Development Bank PLC (NDB) yesterday revealed its plans to raise up to Rs.8 billion via a rights issue.

The bank said its director board resolved to issues 106.7 million new shares in the proportion of 28 new ordinary voting shares for every 61 ordinary voting share held 
at Rs.75 per share.

NDB share closed at Rs.83.40 yesterday, unchanged from the previous close. NDB’s net asset value per share as at June 30, 2020  was Rs.184.25.

The bank’s stated capital as at September 30, 2020 was Rs.8.7 billion represented by 232.6 million ordinary voting shares.

The bank said the rights issue is aimed at bolstering its equity base and thereby improve the capital adequacy in line with Basel III guidelines of the Central Bank and to part finance the growth of its loan portfolio. Sri Lankan government through pension funds and other State-owned organizations holds over 34 percent of NDB’s issued shares.

NDB’s previous rights issue, which was carried out in the latter part of 2018 to raise up to Rs.6.2 billion was not fully subscribed despite being offered an attractive price of close to 50% of net asset value due to poor performance of the Colombo bourse at the time.