14th February 1999
Editorial/Opinion| Plus | Sports |
Apart from the infusion of fresh capital, such placements can facilitate the induction of foreign collaborators with technology and the acquisition of management control. In a direct placement, shares are not offered to existing shareholders or the general public.
Since the new shares are not offered to existing shareholders, there is an element of dilution of their holding. Direct placements permit the raising of large amounts of capital by obviating the need to conform to the procedure of a rights issue.
There are several regulatory concerns, which arise in direct placements, such as pricing, dilution, parties with whom the shares are placed, aspects of control etc. This Consultation Paper proposes certain reforms in some of the critical areas. From a regulatory perspective, the most important challenge arising from these proposals is to seek to maintain a high degree of transparency and security while at the same time allowing listed companies convenient access to the financial markets in order that they may be able to find the necessary financing for development. The table at right summarises the relative merits and drawbacks of a rights offering and a direct placement.
The SEC intends circulating this Consultation Paper to market participants and the share-holding public to elicit views on the subject. Comments may be sent to the Research Division, Securities and Exchange Commission of Sri Lanka, Level 11 East Tower, World Trade Centre, Colombo 1 by February 26th 1999. Comments could also be e-mailed to :— firstname.lastname@example.org.
Regulatory IssuesThe size of the offering: The size of the offering has a direct relationship on the extent and magnitude of dilution. A small shareholder who holds only 100 shares of the issued share capital of a company may consider the dilution as insignificant. However, a shareholder with 10% of the share-holding may consider the dilution significant. Bearing this in mind, in some emerging markets, private placements are restricted to a maximum of 10% of the issued share capital before the placement.
This is to minimise the dilution of the value of existing share-holdings. On the other hand, in some countries, placements which are approved by passing of a Special Resolution by the members of the issuing company are excluded from the ambit of regulations provided that it does not lead to a change in control.
The Securities and Exchange Commission has followed the practice of permitting direct placements of upto a maximum of only 12% of the existing share capital of a company in instances where the new shares are not offered as rights to existing shareholders, even though a placement of a higher percentage may have been sanctioned by shareholders by special resolution.
The Rules and the Regulations of the Colombo Stock Exchange embody the principle of pre-emption rights in respect of a new issue of shares by a company. In terms of this principle, when a company issues new shares, such shares must first be offered to the existing shareholders in proportion to the number of shares held by them, thereby affording them the opportunity to maintain their percentage holding in the company.
ProposalArising from the above there are three scenarios which could be envisaged.
• Permit companies to make unlimited placements with regard to size, provided the placement is approved by the members of the company by a Special Resolution.
• Considering the size, the dispersal of shareholders in Sri Lankan listed companies and the relative ease with which controlling shareholder can pass Special Resolutions, placements should continue to be restricted to a maximum of 12 % of the issued share capital of the company prior to the issue.
• In view of the relative smallness of Sri Lankan companies and the requirement of capital for expansion, a company which affords its existing shareholders an opportunity of retaining their percentage share-holding in the company could be permitted to embark on placements without any size limitation. This could be achieved either through the mechanism of the company first making a rights issue and thereafter placing the unsubscribed rights or through an open offer/placement with a "claw back" provision. In an open offer, shareholders have the opportunity to subscribe for shares to retain their percentage in the enhanced capital at a price decided by the company or at the price established through a book building exercise. The unsubscribed shares would be distributed to placees at the strike price with a provision of a "claw back" if the demand from existing shareholders is strong.
Both (2) & (3) above too would be subject to the approval of members of the company by Special Resolution.
In all cases, a prospectus should be issued clearly explaining the use of proceeds of the placement.
Pricing of the placementThe present pricing practice followed for direct placements is that the shares should not be placed at less than the market price of the particular share in the Colombo Stock Exchange as at the date of the issue. Moreover, there has to be a premium of not less than 2% of the market price of the shares or at the issue price of any rights that may be issued by the company. In any event, the placement shares cannot be priced less than the par value of the share. A premium has been felt desirable to compensate for the dilution of the existing shareholders.
The market price is defined as the weighted average price of shares of the issuing company traded on the CSE during the 5 days preceding the date of allotment. The weighting is based upon the number of shares traded at various prices.
ProposalIt is proposed that the current practice be continued. However in view of the difficulty in determining the strike price in a book building exercise, particularly when placing with international fund managers, shares could be placed at a discount of no more than 10% of the market price if deemed appropriate, provided that the market price is not less than the par value.
Identity and back-ground of placeesPlacements afford an opportunity for the company to expand its investor base. On the other hand that there may arise minority shareholder concerns that controlling shareholders could consolidate control through placements. In this context it would be appropriate if some form of guidelines are established to prevent abuse.
ProposalIt is proposed that in view of Rule 31 of the Company Take-overs and Mergers Code 1995, the issue should be placed with persons who are not connected which each other or with any other substantial shareholder/director. The issuer should be encouraged to give preference to placees who have indicated their intention to be long-term investors. It is also proposed that no more than 20% of the total placement should be allocated to one party or discretionary managed portfolios under the management of the same portfolio manager.
Back to back private placementsFrequent placements could prejudice the value of the holdings of the existing shareholders of the company.
ProposalIt is desirable that due to the dilution factor, an appropriate limitation should be placed on the frequency of placements made by a company during a specified period. It is proposed that direct placements be restricted to once in two years.
Open offerAn open offer is an invitation to existing holders of securities to subscribe or purchase securities in proportion to their holdings, which is not made by means of renounceable letter ( or other negotiable document).
Rule 31 of The Company Takeovers and Mergers Code 1995
Where any person -a. acquires whether by a series of transactions over a period of time or otherwise, shares which taken together which shares held or acquired by persons acting in concert which such person, carry 30% or more of the voting rights of a company: or
b. together with persons acting in concert with such person, holds not less than 30% and not exceeding 50% of the voting rights of a company such person or any persons acting in concert with him acquires in any period of twelve months, additional shares carrying more than 2% of the voting rights,
Such person shall extend within thirty - five days, an offer in accordance
with this rule to the holders of any class of equity shares which carrying
voting rights and which such person or persons acting in concert with him
The order will be financed by loans of US $31 million that Hanjin secured from Trans America Leasing of USA.
All the chassis will be deployed to the US for use in Hanjin Shipping's US operations, replacing old or short term leased chassis as well as to prepare for increase transportation demand.
Hanjin believes the procurement will enable them to provide better customer service in addition to reducing operating costs.
This is the first time that a completely manufactured chassis is being
exported to the US and not a knockdown basis from Korea. It also represent
the largest single order volume ever.
By Gunapala RanasingheThe Finance Ministry has convened a meeting of all shippers and container yardmen for a meeting on Wednesday, mainly to discuss matters pertaining to fixed tariff rates for port charges.
The meeting has been called by Dr. P .B Jayasundera Deputy Secretary to the Treasury mainly to discuss some issues raised by the US Ambassador.
In the recent past, controversies arose among shipping circles regarding Sri Lankan tariff circles. Lankan representatives of foreign vessels principals are of the opinion that the government should not interfere with tariff rates, as it could affect external foreign exchange regulations.
Already many shipping organisations have shown their resentment over
the subject. Hence Wednesday's meeting at 9.30 am at the Auditorium of
the Ministry of Planning and Finance will be well represented by shipping
circles, among whom will be the Association of Sri Lanka Shipping Agents,
Container Transport Associations, Container Yard Associations etc involved
The owner told German newsmen the 870,000 TEUs were carried last year. It said profit had been made on the routes between Asia and Europe and North America but that losses has been recorded on eastbound routes.
No figures were however revealed. DSR Senator has been in the red for years.
In a New Year message to staff and customers, the management of Deutsche Seereederei, a main DSR Senator shareholder said much had happened in 1998.
"The crises in Asia and in Russia have etched deep scars in our company as well as in others," it said and credicted 1999 would "place big demands on us all".
DSR is now just a shadow of the company it was when it was the GDR's state owned shipping company, operating about a quarter of their 160 ships it used to have in service.
The DSR management expects advantages from shipping reforms in Germany, including a tonnage tax, which went into effect at the start of 1999.
"The switch has been thrown to a better future," it declared.
In a related development DSR Senator appointed a new Korean management
spokesman, Wook Kim. He moved from Korea to Bremen to replace Seung Heyon
Rhee who returned to Seoul after two years in the job.
Triumph, a relatively new, top end exporter, has grown 20-fold since its launch in Sri Lanka in 1995. Though comparatively priced higher than the locally available brands, Triumph is gradually becoming a household name because of its exceptional quality and innovative marketing.
Triumph is the only international brand to be manufactured and marketed locally. With over 160 retail outlets and more than 2500 direct sales dealers, Triumph has plans for further expansion and expect a 40-50 percent growth this year.
The company hopes to sell one million pieces by the year 2000 to be the number one foundation garment seller in Sri Lanka, Sharad Amalean, Managing Director, Triumph International said. At present they hold around 10-15 percent of the local market share.
Triumph at a recent dealer convention launched its new range of foundation garments to add to its present range of more than 50 styles.
Chairman, Triumph International, Niranjan Wijesinghe said that they
hope to expand in all aspects of their business and plans to open another
exclusive shop outside Colombo.
CB gives Mirigama its first ATM facilityCommercial Bank's 62nd branch was ceremonially opened in Mirigama at No. 93, Giriulla Road, recently, providing the full range of banking services plus bank's 24-hour ATM facility (CAT) to customers of the area for the first time.
The new branch is connected to the COMNET, the largest computer linked banking network in sri Lanka, enabling customers to operate their accounts from 59 other branches and 62 CAT Machines.
The Bank's Managing Director, A.L. gooneratne said, "Attractive rates of interest offered on minors' savings schemes such as 'Isuru' and 'Arunalu' will encourage savings. Also, both short and long-term loan facilities are available through several schemes of which the nivahana Housing Loan scheme is very popular", he added.
India as largest milk producerIndia is expected to emerge as the world's largest milk producer in 1998-99 with output touching 74 million tonnes, according to the Food and Agriculture Organisation (FAO).
India's milk production is expected to go up from 71 million tonnes in 1997-98 to 74 million tonnes in 1998-99, showing a growth of 4.2 per cent. World milk production in 1998-99 is forecast to grow by 1.8 per cent to 556 million tonnes as compared to 546 in 1997-98.
Production in East European Countries (EEC), Russian Federation and Poland in the current year is expected to be 125 million tonnes, 33 million tonnes and 12 million tonnes respectively, same level as last year.
The US, Pakistan, Brazil, New Zealand and Australia are expected to witness an increase in output to 72 million tonnes, 22 million tonnes, 12 million tonnes and 10 million tonnes respectively. Production in Ukraine is expected to fall from 15 million tonnes in 1997-98 to 14 million tonnes in 1998-99.
EDB gets results from Nordic showsSri Lankan exporters were successful in obtaining orders, positive inquiries and establishing firm business contracts for tea products and gems and jewellery in Norway, Sweden and Denmark following a recent market mission to these countries.
The mission was organised by the Sri Lanka Export Development Board in collaboration with the Embassy of Sri Lanka overseeing NORDIC countries and the Chambers of Commerce of the NORDIC countries. Nine export compaines participated in the programme.
Sri Lanka's total exports to Scandinavian countries have increased from Rs. 2,551 millions in 1996 to Rs. 3,687.91 millions in 1997. There is a positive trend and potential from Sri Lanka to increase and diversify exports to the Scandinavian market.
NORDIC countries have a relatively high per capita income and could be targeted for marketing high value added products. Government has realized the importance of diversification of markets rather than concentrating for few single markets.
In 1994 the EDB held mini exhibitions in NORDIC countries in Malmo, Gothenburg and Stockholm in 1994 which brought in orders worth Rs. 5 lakhs and this increased to Rs. 3.2 million by 1996. One of the interesting orders received was for the Norwegian National dress.
Encouraged by the good results of the mission and the expanding exports
to this region, EDB has planned a series of programmes. Among these are
a workshop for exporters and manufacturers on business opportunities in
the NORDIC region in collaboration with Norwegian Agency for Development
Co-operation (NORAD), Swedish International Development Co-operation Agency
(SIDA), Swedish Federation of Trade, Denmark Import Promotion Office for
Products from Developing Countries (DIPO).
Genetic tests show the HIV virus is closely related to a virus that infects chimps but does not make them sick. It would have been first passed to humans when people butchered and ate chimps, as often happens in Africa.
There have been many competing theories about where HIV comes from. Some groups have even suspected that homosexual men were deliberately infected.
Humans are the only creatures that can get HIV, which stands for human immunodeficiency virus.
Apes and monkeys get a simian immunodeficiency virus, known as SIV. Nonetheless, only three cases of chimpanzees infected with SIV had been documented.
When Hahn's team found the virus in Marilyn, they compared it to the other SIV viruses and to several strains of HIV.
The three SIV strains taken from the west African chimps, known as Pan troglodytes and including Marilyn, very strongly resembled the three subgroups of HIV.
"This is an important finding with significant potential," Dr. Anthony Fauci of the US National Institute of Allergies and Infectious Diseases (NIAID), which helped fund the study, said in a statement.
"This virus infects a primate species that is 98 percent related to humans. This may allow us if done carefully and in collaboration with primatologists to protect this endangered species to study infected chimpanzees in the wild to find out why these animals don't get sick, information that may help us better protect humans from developing AIDS," he said.
Many viruses come from animals. Flu, for example, comes from ducks and pigs. Often the virus does not make its natural host, or reservoir, sick. It must undergo genetic changes to infect another species such as humans, changes that can cause illness.
Hahn's team found evidence of such genetic changes in their chimp SIV, known specifically as SIVcpz.
Hahn said her team also found a great deal of evidence that the chimp SIV swapped genes frequently — something that would happen only if the virus was common.
"A trivial explanation for the observed low frequency of SIVcpz infection in captive chimpanzees is that such animals were either born in captivity or captured as infants before they matured and had an increased risk for SIVcpz infection," they wrote.
Last year, researchers said they had found the first known case of AIDS in a Bantu man who died in 1959 in the Belgian Congo, now the Democratic Republic of Congo. That is just where this subspecies of chimp lives.
Many scientists think the virus spread to people through infected ape
or monkey meat. People in some parts of Africa often hunt and kill chimpanzees,
and a virus can easily spread from blood during butchering. (Reuters)
Stardust began its formidable journey one day late, soaring into a clear afternoon sky aboard a Boeing Delta rocket. A last-minute radar problem on the previous day caused the delay.
NASA's Stardust mission is the first attempt to gather material from beyond the moon and return it to Earth.
It is also the first time NASA has sent a robot on an extraterrestrial pickup and delivery mission. The last time the agency went after samples in outer space was Apollo 17 in 1972, the last of the manned lunar landings.
Not only do we have to get to where we're going ... but then we've got to turn around and come home again," said Carl Pilcher, NASA's science director for solar system exploration. "This certainly adds a new level of complexity and difficulty."
Comets are frozen time capsules; the icy, rocky bodies are thought to be pieces of the original building blocks of the solar system and may well contain compounds from which life formed.Abundant in water and carbon-based molecules, comets continually bombarded Earth some 4 billion years ago.
"Comets can tell us about the history of the early solar system and the early history perhaps of our own Earth," explained the Jet Propulsion Laboratory's Martha Hanner, an astronomer taking part in the $210 million Stardust mission.
Stardust is to meet up with Comet Wild-2 in January 2004, passing within some 90 miles of the 21/2-mile-diameter iceball. The comet is named for its discoverer, retired astronomy professor Paul Wild, pronounced Vilt, who travelled from Switzerland for the launch.
Tiny comet fragments no bigger than a grain of salt hopefully will be trapped by a pop-up collector that's covered with a transparent, ultralight glass foam called aerogel. The most vulnerable parts of the 850-pound spacecraft, about the size of a large refrigerator, are shielded to protect against the swirl of particles.
"We're going as close as we can without getting killed," said Stardust's chief scientist, Donald Brownlee, a University of Washington astronomer.
If all goes well, the comet samples along with interstellar dust gathered en route to the comet will reach Earth in January 2006. The return capsule will separate from Stardust at an altitude of 69,000 miles and parachute into the Utah desert; Stardust will remain in orbit around the sun.
By then, comet discoverer Wild will be 80 years old. He hopes to be around for the celebration.
"If it all works very well, of course, that will be gorgeous," Wild said. "But there are many possibilities of failure or partial failure."
Scientists expect to get less than a thimble full of comet dust back, but that would be plenty for the kind of detailed analysis that's planned. Even the fanciest science instruments on spacecraft cannot begin to compare with the electron microscopes in laboratories on Earth.
This is the first U.S. mission devoted solely to a comet. NASA plans three more over the next four years, two of which will attempt landings.
Going along on Stardust are more than 1 million names etched onto a
pair of silicon chips. People from around the world submitted their names
via the Internet; one chip also contains the approximately 58,200 names
inscribed on the Vietnam Veterans Memorial in Washington. (AP)
Where else can you send an animated Cupid's Day card for free?
To keep pace in fast changing times man has to save time. So what other better way than to use the web. The web has become man's favourite playground since he is short for time. He could meet people on the net, have a board meeting or have a one to one personal chat with a loved one.
This season, the web is filled with Valentine's mush. Almost all the sites have at least one heart or something relating to 'V'day'. Many people are going online this season to send greetings and make purchases. The many companies offering free services such as e-cards and discounts to members is attracting web surfers like moths to a light.
This is not the only reason to go on line this season. You could meet your dream love on the net through one of these on-line dating services that have sprung up since of late. (If you are single that is). You will also find free horoscope services that tell about your compatibility with your partner.
With this kind of technology growing so rapidly, people in the future might never leave their homes. Transport will be a thing of the past. Restaurants that serve candle lit dinners will be no more. All your shopping will be done online and the goods might be tele-ported to your home.
Sounds scary doesn't it? More like a part of a sci-fi story. We might have to get used to it whether we like it or not because at the rate technology is developing this is going to be our future.
Would the inventor of the first computer have ever thought that his
invention could one day be the only link left between one another.
"CALLING all. This is our last cry before our eternal silence." Surprisingly this message, which flashed over the airwaves in the dots and dashes of Morse code on January 31st 1997, was not a desperate transmission by a radio operator on a sinking ship. Rather, it was a message signalling the end of the use of Morse code for distress calls in French waters. Since 1992 countries around the world have been decommissioning their Morse equipment with similar (if less poetic) sign-offs, as the world's shipping switches over to a new satellite-based arrangement, the Global Maritime Distress and Safety System. The final deadline for the switch-over to GMDSS is February 1st, a date that is widely seen as the end of an era.
For although dots and dashes will not die out altogether—they will, for example, continue to be used by amateur radio operators, spies, and some members of the armed forces—the switch to GMDSS marks the end of the last significant international use of Morse. The code has, however, had a good innings. From its origins in 1832, when an American inventor called Samuel Morse first started scribbling in his notebook, it grew to become the global standard for sending messages along wires and, later, over the airwaves. Morse code was, in effect, the network protocol for the world's first Internet: the international telegraph network, whose cables trussed up the globe in the second half of the 19th century.
Appropriately for a technology commonly associated with radio operators on sinking ships, the idea of Morse code is said to have occurred to Samuel Morse while he was on board a ship crossing the Atlantic. At the time Morse was a painter and occasional inventor, but when another of the ship's passengers informed him of recent advances in electrical theory, Morse was suddenly taken with the idea of building an electric telegraph.
Other inventors had been trying to do just that for the best part of a century. Morse succeeded and is now remembered as "the father of the telegraph" partly thanks to his single-mindedness—it was 12 years, for example, before he secured money from Congress to build his first telegraph line—but also for technical reasons.
Compared with rival electric telegraph designs, such as the needle telegraph developed by William Cooke and Charles Wheatstone in Britain, Morse's design was very simple: it required little more than a "key" (essentially, a spring-loaded switch) to send messages, a clicking "sounder" to receive them, and a wire to link the two. But although Morse's hardware was simple, there was a catch: in order to use his equipment, operators had to learn the special code of dots and dashes that still bears his name.
Originally, Morse had not intended to use combinations of dots and dashes to represent individual letters. His first code, sketched in his notebook during that transatlantic voyage, used dots and dashes to represent the digits 0 to 9.
Morse's idea was that messages would consist of strings of numbers corresponding to words and phrases in a special numbered dictionary. But Morse later abandoned this scheme and, with the help of an associate, Alfred Vail, devised the Morse alphabet, which could be used to spell out messages a letter at a time in dots and dashes.
According to the IMO, the signal was adopted because it was easily recognisable
— three dots, three dashes and three dots — and not because SOS stood for
anything such as "save our souls." The SOS signal was adopted at an international
conference convened three months after the Titanic sank in 1912.
BT launched ClickFree last week while LineOne is expected to announce it is abandoning its £9.99 monthly subscription charge in the next few days.
Last year, BT launched the concept of pay-as-you-go Net access with BT Click+. This added a penny a minute to local calls made to the service provider, with the charges showing up on quarterly bills.
Now it is joining the rush to offer free services with existing Click+ subscribers being invited to upgrade to ClickFree. New customers can download ClickFree from its Website or order a free CD over the phone. Helpline charges will match the 50p a minute of other free services.
LineOne is the first of the ISPs supplying significant original content to go free. Jointly-owned by BT, News International and United News & Media, it features the content of newspapers such as The Sun, The Times and Daily Express.
It has around 90,000 subscribers and has seen its chances of expanding
its paying customer base damaged by the runaway success of the Dixons Group's
Freeserve ISP which has accumulated a million accounts in just four months.
LineOne follows Tesco and Arsenal Football Club in switching from subscriptions
to a free service. Others who currently rely on subscriptions are now considering
For Folker, the race was a lot like other UH swim meets, crowds cheered, coaches urged him on, and when he came up for air, he heard the muffled sounds of an announcer's voice. But with one important difference: No swimmer splashed in the next lane. That's because the opposing team was 6,000 miles away.
On 30 January 1999, Hawaii hosted the first e-meet in college swimming history, possibly in the history of collegiate sports. The mastermind of the event is Sam Freas, head of swimming programs at the University of Hawaii, author of nine books, and president of the International Swimming Hall of Fame.
"I originally planned to hook up cameras, do a simulcast across the Web," Freas said . "But I couldn't get any technical help. So we decided to use e-mail."
Freas is more gung-ho than ever to bring his sport into the digital age. "Next year I want to have a cyberspace championship. All competing simultaneously, all the meets visually available to everyone, every team sharing information."
He may never get that chance though. National Collegiate Athletic Association guidelines for swimming competition stipulate that a swim meet is not a swim meet unless it's open to the public and unless two or more teams are competing at the same time at the same site. Freas says his interest in technology was born of a desire to advance his sport. If we can put a man on the moon, we can get a swim meet on the Web."