Co-operative Insurance Company PLC has redeemed 1.1 million cumulative redeemable preference shares for a total consideration of Rs. 16.61 million, including a 9% per annum cumulative return.
In a disclosure to the Colombo Stock Exchange, the insurer said the shares were redeemed on 31 August at a redemption price of Rs. 10 each, in accordance with the terms and conditions applicable to the cumulative redeemable preference shares.
The preference shares were originally issued on 31 December 2020 to the Health Department Co-operative Thrift and Credit Society Ltd.
Following the redemption, the shares will be cancelled and the company’s stated capital adjusted in accordance with the applicable provisions.
Co-operative Insurance said directions and guidelines issued by the Insurance Regulatory Commission of Sri Lanka (IRCSL) relating to the declaration and distribution of dividends apply to dividends declared and distributed in respect of ordinary shares.
It said the cumulative dividend/return attached to the redeemable preference shares represents a contractual obligation arising from the terms and conditions applicable to those shares and does not constitute a dividend declaration or distribution in respect of ordinary shares.
Accordingly, based on the terms governing the preference shares and confirmation from the IRCSL, the company said no further regulatory approval from the IRCSL was required for the redemption and settlement of the cumulative return payable.