HNB Debenture Issue 2013 Prospectus web .3.10 Rights of the Debenture Holders 17 ... Debenture Issue

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Text of HNB Debenture Issue 2013 Prospectus web .3.10 Rights of the Debenture Holders 17 ... Debenture Issue

  • PROSPECTUSDebenture Issue 2013/2018

  • Debenture Issue 2013/2018

    PROSPECTUS

    Managers to the IssueAcuity Partners (Private) Limited

    Hatt on Nati onal Bank PLC

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    Hatt on Nati onal Bank PLC Debenture Issue 2013 PROSPECTUS

    20,000,000 UNSECURED SUBORDINATED REDEEMABLE FIVE YEAR DEBENTURES AT AN ISSUE PRICE OF LKR 100/- AMOUNTING TO LKR 2,000,000,000/-

    WITH THE OPTION TO ISSUE A FURTHER 20,000,000 UNSECURED SUBORDINATED REDEEMABLE FIVE YEAR DEBENTURES AT AN ISSUE PRICE OF LKR 100 EACH IN THE EVENT OF AN OVERSUBSCRIPTION OF THE INITIAL 20,000,000 DEBENTURES

    This Prospectus is dated 22 May 2013

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    Hatt on Nati onal Bank PLC Debenture Issue 2013 PROSPECTUS

    The delivery of this Prospectus shall not under any circumstance consti tute a representati on or create any implicati on or suggesti on that there has been no material change in the aff airs of the Company since the date of this Prospectus.

    If you are in any doubt regarding the contents of this document or if you require any clarifi cati on or advice in this regard, you should consult the Managers to the Issue, investment advisor, lawyer or any other professional advisor.

    Responsibility for the Content of the Prospectus

    This Prospectus has been prepared by Acuity Partners (Pvt) Limited (hereinaft er referred to as Acuity) on behalf of Hatt on Nati onal Bank PLC. Hatt on Nati onal Bank PLC (hereinaft er referred to as HNB or the Bank) and its Directors confi rm that to the best of their knowledge and belief, the informati on contained herein is true and correct in all material respects and that there are no other material facts, the omission of which would make any statement herein misleading. While HNB has taken reasonable care to ensure full and fair disclosure of perti nent informati on, it does not assume responsibility for any investment decisions made by the investors based on the informati on contained herein. In making such investment decisions, prospecti ve investors must rely on their own knowledge, examinati on and assessments on HNB and the terms of the Debentures issued (knowledge, percepti on together with their own examinati on and assessment on HNB and the terms and conditi ons of the Debentures issued) including the risks associated.

    The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of informati on in this Prospectus. However, the CSE assumes no responsibility for the accuracy of the statements made, opinions expressed or reports included in this Prospectus. Moreover, the CSE does not regulate the pricing of the Debentures which is decided solely by the Issuer.

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    Registrati on of the Prospectus

    A copy of this Prospectus has been delivered to the Registrar General of Companies of Sri Lanka for registrati on in accordance with the Companies Act No. 07 of 2007. The following documents were att ached to the copy of the Prospectus delivered to the Registrar General of Companies.

    1. The writt en consent by the Managers to the Issue, Auditors and Reporti ng Accountants to the Company, Lawyers to the Issue, Trustees to the Issue, Bankers to the Issue and Registrars to the Issue for the inclusion of their respecti ve names in the Prospectus.

    2. A declarati on to the eff ect that the Managers to the Issue, Auditors and Reporti ng Accountants to the Company, Lawyers to the Issue, Trustees to the Issue, Bankers to the Issue and Registrars to the Issue have not withdrawn their consent referred to above, prior to the delivery of the Prospectus to the Registrar General of Companies.

    3. The writt en consent by the Auditors and Lawyers to the Company for the inclusion of their respecti ve names in the Prospectus.

    4. A declarati on to the eff ect that the Auditors and Lawyers to the Company have not withdrawn their consent referred to above prior to the delivery of the Prospectus to the Registrar General of Companies.

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    Hatt on Nati onal Bank PLC Debenture Issue 2013 PROSPECTUS

    Representati on

    No dealer, sales person, individual or any other outside party has been authorized to give out any informati on or to make any representati on in regard to this Issue other than the informati on and representati ons contained in this Prospectus and if given or made such informati on or representati ons must not be relied upon as having been authorized by the Company.

    This Prospectus has not been registered with any authority outside Sri Lanka.

    The delivery of this Prospectus shall not under any circumstance consti tute a representati on or create any implicati on or suggesti on that there has been no material change in the aff airs of the Company since the date of this Prospectus.

    If you are in any doubt regarding the contents of this document or if you require any clarifi cati on or advice in this regard, you should consult the Managers to the Issue, investment advisor, lawyer or any other professional advisor.

    For further inquiries please contact the Mangers to the Issue:

    Acuity Partners (Private) LimitedNo. 53, Dharmapala MawathaColombo 07, Sri LankaTel: 011 2 206206

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    TABLE OF CONTENTS

    ABBREVIATIONS AND INTERPRETATIONS 9

    GLOSSARY OF TERMS RELATED TO THE ISSUE 10

    1.0 CORPORATE INFORMATION 12

    2.0 SALIENT FEATURES AT A GLANCE AND PARTIES TO THE ISSUE 13

    3.0 INFORMATION RELATING TO THE ISSUE 15

    3.1 Parti culars of the Issue 15

    3.2 Invitati on to Subscribe 15

    3.3 Subscripti on List 15

    3.4 Objecti ves of the Issue 16

    3.5 Tenure of the Debentures 16

    3.6 Interest on the Debentures 16

    3.7 Payment of the Principal and Interest 16

    3.8 Rati ng of the Debentures 17

    3.9 Trustee to the Debenture Issue 17

    3.10 Rights of the Debenture Holders 17

    3.11 Risk Factors Specifi cally Associated with the Debentures 18

    3.12 Benefi ts of Investi ng in the Debentures 19

    3.13 Transfer of the Debentures 19

    3.14 Listi ng 19

    4.0 PROCEDURE FOR APPLICATION 20

    4.1 Prospectus and Applicati on Form 20

    4.2 Who May Apply 20

    4.3 How to Apply 20

    4.4 Mode of Payment 23

    4.5 Foreign Currency Remitt ance 23

    4.6 Rejecti on of Applicati ons and Delayed Applicati ons 24

    4.7 Basis of Allotment 25

    4.8 Unsuccessful Applicati ons and Refund Payments 25

    4.9 Direct Lodgment with CDS 25

    5.0 OVERVIEW OF HATTON NATIONAL BANK PLC 26

    5.1 Overview 26

    5.2 Group Structure 27

    5.3 Major Shareholders as at 31 March 2013 28

    5.4 Financial Overview 28

    5.5 Principal Acti viti es 32

    5.6 Future Outlook 33

    5.7 Degree of Dependence on Key Customers and Suppliers 34

    5.8 Employees and Labour Union Details 34

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    6.0 FINANCIAL INFORMATION 35

    6.1 Audited Financial Statements 35

    6.2 Five Year Summary 35

    6.3 Dividend Policy 35

    6.4 Rati os 36

    6.5 Details of Other Debt Securiti es 36

    6.6 Details of Outstanding Converti ble Debt Securiti es 36

    7.0 THE BOARD OF DIRECTORS 37

    7.1 The Details of the Board of Directors 37

    7.2 Directorships Held on Other Boards 38

    7.3 Directors Profi les 39

    7.4 Directors Interest In Shares 43

    7.5 Directors Interest in any Asset Acquired, Disposed or Leased 44

    7.6 Directors Interest in Material Contracts 44

    7.7 Declarati on by the Directors 44

    7.8 Directors Remunerati on 44

    8.0 CORPORATE MANAGEMENT AND SENIOR MANAGEMENT TEAM 45

    8.1 Details of Senior Management 45

    8.2 Declarati on by the Managing Director/Chief Executi ve Offi cer 47

    8.3 Senior Management Remunerati on 47

    9.0 CORPORATE GOVERNANCE PRACTICES 48

    9.1 Overview 48

    9.2 Audit Committ ee 48

    9.4 Human Resources and Remunerati on Committ ee 49

    9.4 Nominati ons Committ ee 50

    9.5 Integrated Risk Management Committ ee 50

    10.0 STATUTORY AND OTHER GENERAL INFORMATION 51

    10.1 Inspecti on and Hosti ng of Documents 51

    10.2 Copies of the Prospectus 51

    10.3 Details of Legal, Arbitrati on or Mediati on Proceedings and Penalti es 51

    10.4 Details of Penalti es Imposed by Regulatory and State Authoriti es 51

    10.5 Details of Conti ngent Liabiliti es 51

    10.6 Financial Statements 52

    10.7 Taxati on 52

    10.8 Cost of the Issue 52

    10.9 Underwriti ng and Minimum Subscripti on 52

    10.10 Brokerage 52

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    10.11 Transacti ons with Directors/Promoters 52

    10.12 Take-over Off ers 52

    10.13 Confl ict of Interest Between HNB and Trustee 52

    11.0 STATUTORY DECLARATIONS 53

    11.1 Declarati on by the Directors 53

    11.2 Declarati on by the Managers to the Issue 54

    11.3 Declarati on by the Company 54

    ANNEX A : ACCOUNTANTS REPORT AND FIVE YEAR SUMMARY FOR THE INCLUSION IN THE PROSPECTUS 55

    ANNEX B : HATTON NATIONAL BANK PLC AND ITS SUBSIDIARIES, AUDITORS REPORT TO THE BOARD OF DIRECTORS AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2012 65

    ANNEX C : CREDIT RATINGS REPORT BY FITCH RATINGS LANKA LTD 187

    ANNEX D : COLLECTION POINTS 191

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    ABBREVIATIONS AND INTERPRETATIONS

    In this Prospectus the following ABBREVIATIONS/INTERPRETATIONS apply unless