Laugfs Gas, Chairman, W. K. H Wegapitiya said, Lanka has enough business for the two LPG players and the governments takeover of Shell Gas would not be a major challenge to its business.
Announcing the Allotment of shares of its successful IPO, he said, Sri Lanka has enough business for the two companies with its growing demand.
The LPG business is expected to have an average growth of 25 percent, boosted by the end of the conflict and changing lifestyles.
He said although the government has take over Shell the existing agreement with the CPC on providing LPG to the company was expected to continue, however, the company only depends on 30 percent of its LPG requirement. Wegapitiya said in the event CPC discontinued its supply, Laugfs was ready to import its entire requirement.
In such an event, Laugfs’ cost would be impacted because it enjoys a small price benefit by purchasing its LPG from the domestic market, Wegapitiya said.
He further noted that the company is in the process of developing its business to capture more market share while it continues to diversify.
The company enjoys more than 60 percent market share in the industrial LPG sector and 90 percent in the automotive sector. The domestic sector is in the path of progress and the amount of market share the company has achieved for its nine years of existence is greater than expected, Wegapitiya said.
He said that with the opening of the North and East the company has embarked on an aggressive marketing campaign in the two provinces.
He said that the IPO was to access much needed funds while providing the local citizens a stake in the company.
The IPO...
Laugfs Gas Ltd announced its share allotment yesterday. The IPO was more than 20 times oversubscribed. It offered voting and non-voting shares to raise Rs. 2.5 billion which was 22 percent of the company’s equity capital.The IPO attracted funds amounting to Rs. 42.3 billion.
The company issued 75 million voting shares and 52 million non-voting shares on the basis of 80 percent to the public and 10 percent each to employees and dealers/customers.
The voting shares were 20.2 times oversubscribed while non-voting were 21.8 times oversubscribed.
The theme of the offer "Golden Harvest", created much hype and excitement and enthusiasm and attracted 64,000 applications, creating a record in the Colombo Stock Exchange, Wegapitiya said.
The subscription lists were closed on November 4, the first day itself. The share issue was oversubscribed by 8.30 am on the opening day and the CSE regulation compelled it to be closed, Wegapitiya said.
Many of the applications where from rural areas and many were first-time investors in the capital market, he said.
All the applicants would be given shares with a favourable allotment, he said.
The funds will be utilized to expand its business; the company is in need of enhancing its storage, and filling capacities with market demand expected to increase. The company would be widening its distribution network and introducing new LPG products.
Also, part of the funds would be utilized for two development projects envisaged by two of the company’s subsidiaries to construct a 100 room hotel in Chilaw which was noted as a tourism hotspot and a 72 roomed serviced apartment complex in Maya avenue Colombo 06.
The rest of the IPO funds would be utilized to retire high cost short and long term borrowings. This was expected to improve the bottom-line of the company and would also contribute to ease the strain on cash flow.
source - www.island.lk
No comments:
Post a Comment