Windfall for applicants for additional shares on Sampath rights issue?



Will applicants for additional shares on the recent three for 13 Rights Issue 2018 priced at Rs. 250 per share have a small windfall from the allotment of unsubscribed shares as was done in November 2017 when an unusually high maximum 9,000 shares each were allotted to those who sought them at the last issue price of Rs. 245 a share?


Analysts said that there has been no formal announcement on the basis of allotting additional shares to those who have made cashed backed applications for them in the usual manner. But the bank announced through a Stock Exchange filing a few days ago that the rights issued had drawn Rs. 15.3 billion in applications for both entitlements and additionals.


Given that approximately 50.13 million shares were available, the bank’s published figures indicated that there were cash-backed applications for 11.08 million shares more than that.


"Given the procedure adopted last time of dividing the number of unsubscribed shares available by the number of applicants for them, resulting in some shareholders, however small their shareholdings getting as many as 9,000 shares, there were many more applications for additional shares this time round," an analysts said.


"Even if the same procedure as last time is adopted, there will be fewer shares to allot but those who applied for additional shares over and above their entitlement would still do well given the gap between the rights issue price and the secondary market price of the Sampath share," a broker said.


Once the Sampath directors decide on the basis of allotment of additional shares, shareholders who subscribed for the rights issue will be individually advised of the number of shares allotted to them, both on the basis of entitlements and additional, and refunds will be made as early as possible to those applicants for additional shares allotted less than they asked for.


Brokers expected the figures to be finalized soon after the holiday period. A small quantity of Sampath traded at slightly over Rs. 300 on the CSE on Thursday.


 
 
 
 
 
 
 
 
 
 
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