Amana Bank to make Rs. 6.7 Bn Rights Issue to fuel growth

Amana Bank PLC has announced its intention to raise LKR 6.7 billion in equity capital by way of a Rights Issue, marking a significant milestone in the Bank’s journey towards its next phase of growth.

As per the communique sent to the Colombo Stock Exchange (CSE), the Bank will issue 2,902,267,365 ordinary voting shares in the proportion of 1 new share for every 1 share held at a consideration of Rs 2.30 per share.

The issue is subject to CSE and shareholder approval. With the forthcoming Rights Issue, the Bank will increase its capital base to over LKR 20 billion, which would successfully facilitate in meeting the minimum capital requirement for licensed commercial banks well before the regulatory timeline.

The proposed capital infusion will also strengthen the Bank’s Capital Adequacy Ratio to facilitate its planned growth and expansion. Having listed in the CSE in January 2014 after an oversubscribed IPO, Amana Bank has recorded impressive financial performance over the last decade, despite going through periods that were marred by the Covid-19 pandemic and other economic and social challenges. As a result of its resilient performance the Bank has successfully declared 6 consecutive dividends starting from 2018, totalling its dividend pay-outs in excess of LKR 1.4 billion.

The Bank also successfully carried out a Rights Issue in 2017, which was oversubscribed owing to the confidence expressed by its local and foreign shareholders.

As March 31,2023 Amana Bank’s Net Asset Value per share stood at LKR 5.24, making the Right Issue price of Rs 2.30 per share discounted at 56% an attractive buy.

Commenting on the rights issue, Amãna Bank’s Chairman Asgi Akbarally said “We are delighted to announce our latest Rights Issue, an instrumental step in propelling our bank’s growth trajectory.