Sri Lanka shares recovered after technical correction.

26-06-2009.

Colombo market recovered after four days of continuous decline. ASI was up by 33 points (1.36%) to close at 2452.01 while MPI was gained 32.17 points (1.19%) to close at 2727.46. Turnover for the day was Rs 596.4 million.

Index heavy weight JKH & SLT both gained today. JKH was up by 2.50 to close at Rs 136.00 while SLT closed the day one rupee higher at Rs 49.00. Over 2.5 million Coco Lanka shares traded within price range of Rs 28 to 32.25 & closed 3.25 higher at Rs 30.75.

Lanka IOC (Subsidiary of Indian Oil Corporation) announces further investment of US$ 30 million to establish outlets in North & East of the country. LIOC closed 50 cents up at Rs 17.50.

Announcements - Colombo Stock Exchange.

26-Jun-2009 REORGANIZATION OF SEYLAN BANK PLC - CENTRAL BANK OF SRI LANKA

The Central Bank of Sri Lanka has informed the CSE that "We refer to our letters dated April 20, 2009 and May 22, 2009 and the announcement made to the marker, on the above subject.The Monetary Board of the Central Bank of Sri Lanka has decided on June 25, 2009 not to accept the bid received form the bidder as the strategic investor for Seylan Bank PLC.

Accordingly, the share issue of Seylan Bank PLC mentioned in our letters under reference ceases to be in effect. Hence, we herewith attach an "Announcement to the Exchange" as required under Rule 5(4)(c) of the Listing Rules (April 2009), for your kind consideration and necessary action. ANNOUNCEMENTFurther to the announcements made to the Colombo Stock Exchange on April 20, 2009 and May 22, 2009 by the Central Bank of Sri Lanka with regard to the issue of securities of Seylan Bank PLC by way of a private placement under and by virtue of the powers vested with the Monetary Board of the Central Bank of Sri Lanka, In terms of section 30(9) of the Monetary Law Act. The Monetary Board has concluded that the offer received by a prospective strategic investor has not fulfilled all the parameters set by the Central Bank in relation to the ownership limits. Therefore, it has decided not to accept such offer.

The Monetary Board has now directed the Seylan Bank PLC to Issue an appropriate number of voting shares so as to generate a capital infusion Rs. 3 billion by end August 2009. Towards such end, the Seylan Bank PLC will be required to invite investments from few state institutions so that such institutions could collectively invest approximately 33 percent of the ordinary shares of the bank.

The existing shareholders and other new local and foreign investors too, could participate in the new share issue, which is expected to take place in August 2009. The new Infusion of the capital is expected to significantly strengthen the operations of the bank as well as ensure its stability and soundness in the long term. In the meantime, the Central Bank has requested the Bank of Ceylon to continue with its managerial assistance to the Seylan Bank PLC until the Monetary Board decides to discontinue with such assistance. The current Directors of Seylan Bank PLC will continue to serve in the Board."