SLT unions up in arms against moves to sell shares

By Maheesha Mudugamuwa

Trade unions at the semi-state owned Sri Lanka Telecom (SLT) will decide this week on the measures they will take to protest against SLT’s decision to sell 4.74% of its shares, which they claim is aimed at weakening its state ownership.

The Lanka Telecom Services Union (LTSU) General Secretary P.S.B. Jayasundera told The Morning that with the latest decision taken by SLT, the state ownership would be further reduced as they were planning to sell 4.74% of shares out of the government-owned 49.5%.

He stressed that the measure would affect SLT’s official content of its Director Board as well as the rights and privileges of its workers. It would also affect SLT’s customer base, he added.

Jayasundera said the issue was still not known to the majority of its workers and therefore they would discuss the matter with their members and would decide future action as the union was vehemently opposed to the privatisation of the semi-government SLT.

Last week, trading in shares of the Colombo Stock Exchange (CSE) listed SLT was halted pending an announcement of an upcoming private placement.

According to the announcement published on the CSE website, the director board of Sri Lanka Telecom PLC (SLT) had resolved to go for a private placement of shares to meet the minimum public free float requirement as per the CSE listing rules.

In a letter addressed to the CSE Chief Regulatory Officer Renuke Wijewardhane, the SLT Group Company Secretary Mahesh Athukorala, stated that SLT would issue 89.7 million ordinary voting shares, representing 4.74% of the issued shares of the company, to local and foreign institutional investors.

The letter further stated that the price at which the shares would be issued through the PP had not yet been determined, and would be informed subsequent to a share valuation, feedback from potential investors, and resolution by SLT Directors.

The current stated capital of SLT is Rs. 18 billion, represented by 1.8 billion ordinary shares. As at June 30, 2018, SLT’s public holding stood at 5.52% in the hands of 12,299 shareholders.

SLT has explained that the primary purpose of carrying out the private placement was to meet the minimum public shareholding requirement as per the CSE listing rules. The funds expected to be raised through the PP of shares would be utilised to restructure the debt portfolio of SLT by refinancing its short term borrowings.

As at June 30, 2018, the SLT group had short-term borrowings of Rs. 19.35 billion, down from Rs. 26.9 billion six months ago.