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Tuesday, October 26, 2010

Dhammika reinvents himself

* Floats investment holding company Vallibel One Ltd., to consolidate personal holdings in select companies

* Starts with Rs. 5.3 b transfer of 51% control in LB Finance

* 51% stake in Royal Ceramics and 15% stake in Sampath Bank together worth Rs. 15 b to follow

* Eventual public listing of mega entity planned to broad base ownership and raise capital to build two five star resorts with 1,000 rooms by 2014

One of Sri Lanka’s top investors and entrepreneurs the young business leader Dhammika Perera appears to be reinventing himself with the floatation of an investment holding company named Vallibel One Ltd., to consolidate a few of his many personal holdings in listed companies.

The exercise was kicked off yesterday when he transferred 51% stake in one of the fastest growing finance companies LB Finance for Rs. 5.3 billion to Vallibel One Ltd. The deal amounting to 17.66 million shares was executed at Rs. 300 each. This transfer was the most significant event in an otherwise depressed stock market and accounted for 67% of the day’s turnover. In total 17.75 million shares of LB Finance traded between a high of Rs. 297 and a low of Rs. 285 before closing at Rs. 293.50, down by 90 cents.

Sources said that Dhammika is keen to institutionalise his personal holdings in a range of companies and has started it off with Vallibel One Ltd., at present 100% owned by him. This venture is expected to acquire 51% stake in Royal Ceramics Plc, the biggest player in the tiles market and 15% stake in Sampath Bank., the third largest privately owned commercial bank.

At yesterday’s closing price of Rs. 329.70, the stake in RCL amounting to 28.35 million shares is worth Rs. 9.3 billion. On the strength of impressive earnings with RCL upping net profit by 114% to Rs. 606.5 million in the first half, its share price peaked to a high of Rs. 336 before closing at Rs. 329.70, up by Rs. 5.80.

Apart from a 5% stake under his personal name Dhammika also controls a further 5% each in Sampath Bank via Vallibel Investments and Vallibel Leisure. This stake (around 21 million shares) at yesterday’s closing price is worth Rs. 6.3 billion and the transfer will be done following regulatory approval.

These three listed stakes are worth around Rs. 21 billion in terms of current market prices. Vallibel One also has two subsidiaries one to focus on leisure sector and another specialising in wind power, a renewable energy source. The leisure sector aims to command around 1000 five star class rooms by 2014 via two hotels, blueprints of which have been finalised. One hotel in Negombo to have 380 rooms and the other in South will have 620 rooms. The wind energy venture will be producing 160 KW of wind energy.

Dhammika plans to take Vallibel One public to broadbase ownership as well raise capital to build the two hotels to better harness the post-war rebound in tourism. The two resorts will be outside the properties owned by Amaya Leisure Plc, which is also controlled by Dhammika.

Among his several listed holdings personally and via connected parties apart from Amaya include control in Hayleys Plc., PABC Bank, Vallibel Finance, Vallibel Power Erathna, Fortress Resorts, Lanka Alumnium Industries. The listed portfolio includes seven companies outside Vallibel One.

source - www.ft.lk