Target Price : RM8.35
Union Bank of Colombo has inked a deal to raise 1.5 billion rupees (RM42m) in capital from Genting Group, a Malaysian conglomerate and Shorecap, a US based banking fund. It hopes to go public within a year, an official said. "Genting is giving 1.0 billion rupees (RM28m), Shorecap 500 million rupees (RM14m)," Union Bank chairman Ajita de Soyza said. “In a couple of months we will be planning an IPO (initial public offering) as well." Under a private placement, Genting would get a 20% stake in the bank and Shorecap, 13%, Soyza said. (Lanka Business Online)
Maintain BUY. We are NEUTRAL on the acquisition given its smallish size and potentially strong percentage returns to be gained upon IPO. Maintain our BUY recommendation and target price of RM8.35.