Sri Lanka LMF in rights issue to fund new plant

Sri Lanka LMF in rights issue to fund new plant
June 01, 2010 (LBO) - Sri Lanka's Lanka Milk Foods (LMF) plans to make a one for three rights issue to raise funds to meet the costs of its new milk plant, a stock exchange filing said.
LMF, a milk powder packer which is part of Distilleries group, said it will issue 9,999,500 ordinary shares at 70 rupees each subject to approval from the stock exchange and shareholders.

It said its board of directors decided to call for further investments from shareholders through the rights issue to meet the costs of its new plant set up by subsidiary Ambewela Products in Nuwara Eliya in the central hills.

"The total cost of buildings, plant and machinery and other accessories that LMF had to meet was well over a billion rupees," the statement said.

The new milk processing factory which has a capacity of 9.5 million litres of cow milk began production in April and produces flavoured milk packs, cheese and yoghurt.

It also has a milking parlour, an automated feed mill and cow shed for 300 milking cows.

LMF operates two farms producing cow milk that is processed, packed and sold under the 'Ambewela Fresh Milk' brand.