Ceylon Hospitals PLC, owners of the Durdans Hospital, is floating a rights issue to raise Rs.118.4 million to retire debt incurred for a prime land purchase by issuing one new voting and non-voting share for every 11 such shares held.

The voting shares are priced at Rs.57 each the non-voting share at Rs. 30 which the directors have said they consider ``fair and reasonable.’’

The company has told its shareholders that it had the opportunity of buying a block of land along Alfred Place almost adjacent to the hospital to be utilized as a car part which was necessary given future expansion plans of its subsidiary, Durdans Medical and Surgical Hospital Limited.

An extraordinary general meeting of shareholders has been summoned at 3 pm on November 11 to enable the passing of resolutions approving the rights issue.

"In view of the urgency of completing the land transaction, a short term loan was obtained from a funding institution," Durdans has said in a circular to members of the company.

"Eighty percent (80%) of the anticipated funds to be raised by the rights issue would be utilized to repay the above mentioned short term loan, with the balance 20% utilized to purchase medical equipment.’’

Rs.94.7 million of the funds expected to be raised will be utilized to immediately retire the short-term loan and Rs.23.7 million utilized to purchase medical equipment within three months of the funds being raised, the company said.

The Durdans voting share has traded in recent weeks at a high of Rs.85.25 on September 28 and a low of Rs.73 on September 8 closing the month at Rs.80.25.

In August it traded at a high of Rs.75 and a low of Rs.73 closing at Rs.73.25 while in July the high was Rs.79.50 and the low Rs.65 closing at Rs.73.75.

Similarly the non-voting share traded between Rs.43.75 and Rs.35.25 closing at Rs.43 in September, between Rs.37 and Rs.34.25 closing at Rs.36 in August and between Rs.38.75 and Rs.32.50 closing at Rs.35 in July.