Tuesday, January 4, 2011

Sudden cash at DIST triggers guesswork

Three schools of thought have emerged about the 'cash at hand' situation faced by the business tycoon Harry Jayawardena controlled Distilleries with the government deciding to pay back the company in cash instead of treasury bills as agreed following the verdict of the Sri Lanka Insurance case.

The first school of thought suggests that Distilleries would announce a dividend with the Rs 5.7 billion the firm received from the government.

"This is a once possibility that you can't rule out. But it won't be thumping one" a market analyst said.

The second school of thought is that tycoon Harry Jayawardena would use the money to further consolidate his control in the companies he has interests in. Analysts think such a move would in a way be positive as Harry J led companies are likely to focus on their core competencies instead of making investments in rather unknown territories.

The third school of thought comes with the fact Harry J wanting to divest some of the business he controls such as NAMAL, Lanka Bell and Madulsima Plantation.

"These companies are up for sale because of the reasons involving their management and profitability. But when they have money to inject and restructure will these entities be sold off?" A market analyst DM Business talked too questioned.

The government last week resorted to pay a sum of Rs.5.7 billion to Distilleries PLC, which the firm paid in acquiring 90 per cent stake of Sri Lanka Insurance Corp. However the Sri Lanka Insurance Corp. was subsequently returned to the hands of the government following public interest litigation case by Nihal Sri Amarasekera and Vasudeva Nanayakkara.

Our attempts to contact Distilleries chief executive Damien Fernando and finance head N.Nagahawatte to obtain comments on the matter were not fruitful.

source - www.dailymirror.lk

No comments: