"It is important to look into new avenues of investments that can sustain its business in the long term in light of new market developments that are taking place. Private equity investment is one such area. Therefore the Board of Directors of GCP recommends changing the company's investment strategy to investing in more lucrative private equity investments" the circular said.
The company believes that being the only listed company 'conducting business in this area' it can attract overseas investors who are willing to partner GCP to invest in private equity projects via a listed vehicle.
It also believed that the new investment strategy would allow the company to invest in private equity at low valuations and securing high returns when compared to investing in fully valued listed companies.
GCP recently informed the Colombo Stock Exchange that it has invested Rs.250 million of its rights issue money in Expolanka, a freight forwarding company with a regional touch that is expected to go public shortly.
However the circular also cautioned the shareholder saying that the private equity investments under the new investment strategy will be long term in nature and would tend be illiquid during the tenure of the investment.
"Tenure of investment will vary from investment to investment. Thus the investment cycle consist of waiting period following the initial investment stage, after which the encashment of maturity proceeds will enable dividend payout and reinvestment into new projects" the circular noted.
The Board of Directors of Watapota Investments Plc has resolved to propose to its shareholders to change its existing name to Guardian Capital Partners Plc.
The move is subject to approval by shareholders at an EGM to be convened shortly.
Recently Watapota figured in heavy bidding for its control via voluntary offers after which Carson Cumberbatch decided to reject all offers and strengthen the Company's focus.
source - www.dailymirror.lk
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