DFCC rights issue successful despite undersubscription

The Rs.6 billion rights issue by DFCC Bank PLC has closed successfully with most of the bank’s major existing shareholders taking up their allocations and may be applying for additional shares though the issue closed 10 percent undersubscribed.

DFCC last Friday said it had received subscription for 98.6 million shares to the value of Rs.5.42 billion.

The bank issued 109.2 million shares at the price Rs.55 per share in the proportion of 12 new shares for every 37 shares held. The rights were priced at premium compared to the current DFCC share price of Rs.43.

Analysts said it appears that DFCC’S major shareholders have either taken up their rights allocations in full and/ or applied for additional shares or a smaller shareholder has applied for substantial additional allocation.

DFCC said the shares that remain unsubscribed after allocation to shareholders who applied for additional rights will be allotted by the Board at the discretion of any person or persons.

Hatton national Bank as the single largest shareholder of DFCC as at March 31, 2022 held 14.91 percent stake in the bank, while Bank of Ceylon as the second largest shareholder had 12.51 percent. High net worth investor M.M. Yaseen was the third largest shareholder of the bank with 10 percent stake.