The innovative fund raiser of Union Bank, consisting of a Rights Issue, a Private Placement and a subsequent Initial Public Offering which has received a remarkable and overwhelming level of attention from both local and foreign investors, moved into an exciting phase with the preliminary stage of the process, the Rights Issues held on 23rd December issuing 10 million shares at Rs 25/= to the existing shareholders being over subscribed by 4 times.
The next phase of the fund raiser will be the Private Placement of an additional 20 million shares. The shares would be issued on a tender basis and will incorporate a book building process, which is unique to Sri Lanka. Subsequently, 15 million shares will be issued through the proposed Initial Public Offering (IPO) planned for the first quarter of 2011. Analysts state that this is a much sort after, and a rare, investment opportunity. The Bank is working with its advisors NDB Investment Bank and Acuity Partners on the proposed IPO. On completion of this multi-stage process, the Bank will fulfill all Central Bank requirements pertaining to Capital Adequacy until year 2015.
Anil Amarasuriya, Director /Chief Executive Officer of Union Bank stated that "The over subscription of the Rights Issue highlights the confidence expressed by our existing shareholders". He further stated that "We are entering an exciting phase; the Country's Per Capita Income is expected to double in five years, and the Banking industry is poised as a key growth sector, thus concurrently highlighting exciting future opportunities for Union Bank."
The Bank plans to raise in excess of 1.1 billion through the above funding methodologies and expects to support the implementation of the Bank's ambitious expansion and consolidation programmes in the next couple of years. "To this effect, we will be making further announcements on our Organic & Inorganic growth plans for the Bank" he said.
Indubitably one of Sri Lanka's fastest growing Banks, Union Bank will soon be a force to reckon with in the Banking industry, offering advance banking solutions to both the Small and Medium Enterprise and Retail sectors in Sri Lanka. Amarasuriya stated that the Bank's plans are on track, supported by sound financial standing, network expansion, value addition to its products, image building, and technology upgrades, the Bank is well geared to becoming a Power House in banking.
An indigenous Bank, Union Bank has, since it commenced operations in 1995, chalked up many successes, including the introduction of many firsts to the banking industry. The Bank currently has 21 branches including 05 in the North of Sri Lanka and is expected to open up to 10 new branches in the coming months.