In a Stock Exchange filing yesterday, Galadari Hotels (Lanka) PLC communicated a board decision to convert the loan granted to it by the Sri Lanka Government and part of the loans from Galadari Brothers Company LLC into equity at a price of Rs. 10 per share neary doubling the present stated capital of the hotel owning company.

Galadari Hotels’ Secretaries said that the SEC had on June 16 informed the company that shareholders’ approval for converting the loans to equity and issuing new shares by private placement be obtained before the SEC decides on this matter.

The company’s debt to Government including accrued interest amounts to Rs.534.2 million and part of the loan due to Galadari Brothers to be converted amounts to Rs.1.24 billion.

It was intended to convert these debts to equity at a price of Rs.10 per share with a maximum of approximately 53.4 million shares being issued to the Government and 123.8 million shares to Galadari Brothers.

Galadari Hotels currently has a stated capital of Rs.1.8 billion

Galadari Hotels also said that the proposed private placement is subject to the approval in principle of the Colombo Stock Exchange for listing on the shares and shareholder approval as well as approval of the SEC for a waiver on the restrictions imposed on the private placement.