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Sunday, January 3, 2010

MANDATORY OFFER BY ERIL AT RS 55.00 / SHARE FOR CEYLON LEATHER

Environmental Resources Investments PLC (ERIL) that has made a mandatory offer to acquire all ordinary shares of Ceylon Leather Products PLC (CLPL) not held by itself and its parent, Lionhart Investments Limited, plans to expand the present business of CLPL by attracting foreign retail customers, especially foreign military shoe tenders, in line with the investment strategies of the offeror.
ERIL had on November 27 held 29% of the equity of CLPL while its parent, Lionhart, owned 23.79% with the two companies together holding 52.79%.

ERIL had acquired slightly over 3.6 million shares of CLPL on the CSE on November 27 having paid the highest price of Rs.55 per share within 12 months of that date.
With ERIL and Lionhart exceeding the statutory threshold of 30% of CLPL, this acquisition triggered the mandatory offer provision of the SEC’s Takeovers and Mergers Code.

The offer to the minority shareholders, which if fully subscribed will cost the offer or Rs.324.6 million, has now been made and Deutsche Bank AG’s Colombo branch has certified that sufficient resources are available with the offeror to satisfy full acceptance of the offer.

ERIL is a quoted investment holding company listed on the CSE with five directors, four Sri Lankan and one foreign on its board.

Mr. L. Heengama is the Chairman of the company and Dr. K. Heengama Deputy Chairman. Messrs. H.B. Dissanayake and G.S. Munasinghe are independent directors and G. Scott Newsome is the foreign director.

Subsequent to ERIL’s last financial statement of September 30, 2009, it has acquired 100% of the stated capital of DHN Financial (Pvt) Limited and 10% of the stated capital of the People’s Merchant Bank on October 20, 2009.
ERIL also has acquired 100% of HNB Stockbrokers (Pvt) Limited.
ERIL has no immovable properties and its balance sheet showed a stated capital of Rs.382.8 million, up from Rs.35.1 million a year earlier, reserves of Rs.3.3 million and accumulated losses of Rs.12.6 million (against accumulated losses of Rs.26.9 million a year earlier).

The company earned a profit of Rs.21.8 million from continuing operations during the last financial year including Rs.35 million profit earned from the disposal of shares of Walker & Greig (Pvt) Limited.

source - wwwsundayisland.lk