Colombo, Sri Lanka – 09 September 2026 – Kerner Haus Global Solutions PLC (KHGS), a company listed on the Colombo Stock Exchange (CSE), today announced a significant Rights Issue of Ordinary Voting Shares aimed at raising LKR 420.119 million. The capital injection is strategically designed to strengthen the company’s balance sheet, enhance liquidity, and finance ambitious acquisitions of real estate assets and leasehold properties across key regions of Sri Lanka.
The Board of Directors of Kerner Haus Global Solutions PLC approved the Rights Issue at a meeting held on 1st June 2026, subsequent to which the CSE granted its approval in principle on 2nd September 2026, in terms of Section 5.2 of its Listing Rules. Shareholders will convene for an Extraordinary General Meeting (EGM) on 2nd October 2026 to consider and approve the proposed resolutions.
Key Details of the Rights Issue
The Rights Issue entails the offering of up to 10,502,975 Ordinary Voting Shares at a price of LKR 40/- per share. This offering will be made in the proportion of one (01) new Ordinary Voting Share for every four (04) existing Ordinary Voting Shares held by shareholders as at the end of trading on 6th October 2026, which is designated as the Record Date.
The issue price of LKR 40/- per share was determined by the Board to be fair and reasonable, taking into consideration the Volume Weighted Average Price (VWAP) of LKR 46.08 over the period from 20th April 2026 to 1st June 2026, and the closing share price of LKR 42.50 as at 1st June 2026 (the market day of Board approval). It is noted that the closing market price as of 8th September 2026 was LKR 30/-.
Upon full subscription, the Rights Issue is expected to increase the company’s stated capital by LKR 420.119 million, moving from a pre-Rights Issue stated capital of LKR 30,358,500/- to a proposed post-Rights Issue stated capital of LKR 450,477,500/-.
Strategic Objectives of the Capital Raising
The primary objectives behind this significant capital raising initiative are multifaceted:
- Strengthening the Balance Sheet and Liquidity Position: The proceeds will infuse new equity capital, significantly improving KHGS’s net asset position, overall financial strength, and providing greater flexibility for future investment opportunities.
- Acquisition of Strategic Real Estate Assets (LKR 300 Million): The company plans to deploy LKR 300 million to acquire and fit-out strategically located commercial real estate assets in key cities including Colombo, Kandy, Jaffna, and Galle. These acquisitions are aimed at generating attractive rental yields, long-term capital appreciation, and sustainable recurring income.
- Acquisition of Properties on a Leasehold Basis (LKR 120.119 Million): An allocation of LKR 120.119 million will be used to acquire and fit-out commercial real estate properties on long-term leasehold arrangements in Colombo, Kandy, Jaffna, and Galle. This strategy aims to optimize capital deployment by accessing prime locations with a lower initial outlay.
Kerner Haus Global Solutions PLC anticipates utilizing the funds within 12 months from the listing date of the new Ordinary Voting Shares. Any unutilized funds will be temporarily invested in high-yielding money market instruments with Licensed Commercial Banks.
Addressing Financial Stability and Major Shareholder Commitment
The latest unaudited financial statements as at 30th June 2026 revealed that KHGS is facing a serious loss of capital, with accumulated losses leading to a negative equity position of approximately LKR 36 million. The proposed Rights Issue is crucial for strengthening the company’s capital base, turning around its net liability position, and restoring financial health. The successful implementation of this initiative is expected to result in a positive net asset value increase of approximately LKR 383.6 million.
Ekta Global Pte. Ltd., the major shareholder holding 63.62% of KHGS’s equity capital, has demonstrated strong confidence in the company’s future by committing to subscribe fully to its entitlement under the Rights Issue. Furthermore, Ekta Global Pte. Ltd. has undertaken to subscribe for up to an additional 1 million unsubscribed rights shares, amounting to LKR 40 million, to ensure greater subscription certainty. In the event of any further undersubscription beyond this commitment, the company intends to bridge any funding shortfall through credit facilities from licensed commercial banks and adjust its growth projections accordingly.
Benefits and Risks for Shareholders
Existing shareholders are presented with an opportunity to maintain their proportionate ownership and participate in KHGS’s revised growth strategy, which seeks to enhance liquidity, strengthen the balance sheet, and expand its real estate portfolio. Successful execution of these objectives could contribute to asset base growth, improved long-term earnings, and sustainable shareholder value.
However, potential risks associated with the issue include property acquisition risks (failure to identify suitable assets or achieve projected returns), leasehold property risks (lease restrictions, renewal uncertainties), real estate market risks (market downturns, reduced demand), deployment risks (delays in fund utilization), and general economic and business risks.
Important Dates for Investors
Shareholders should note the following key dates:
- Extraordinary General Meeting (EGM): 2nd October 2026, at 10:30 a.m. (Fully Virtual Meeting).
- Shares Trade Ex-Rights (XR): 5th October 2026.
- Record Date (Date of Entitlement): 6th October 2026.
- Dispatch of Provisional Letters of Allotment: 13th October 2026.
- Last Date for Acceptance and Payment: 29th October 2026.
The Board of Directors strongly recommends the Rights Issue for shareholder approval, viewing it as a critical step towards realizing the company’s renewed business plan and securing its long-term growth prospects. Shareholders are advised to consult their stockbrokers or other professional advisers immediately if they are in doubt as to the action they should take.
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