May 27, 2011 (LBO) - Sri Lanka's listed Lion Brewery said it will sell out of Carlsberg's Indian unit as investment needs in the home market which is looking up after the end of a 30-year war took priority.
Lion Brewery had a stake in South Asian Breweries Pte Ltd since 2006 which was the holding company of Carlsberg India (Pvt) Ltd, which the firm was now selling to Carlsberg South Asia.
Lion said the investment required in India was around 200 million in the near terms.
"The Board has also evaluated the significant investments that are required to be made in its Sri Lankan business over the short to medium term to capture opportunities and meet the emerging positive economic environment," Lion Brewery said in a stock exchange filing.
"The Board is conscious of Sri Lanka being the company's home market and as such, is of the view that maintaining its focus on the current market position is the topmost priority and one which would in turn deliver the most financially beneficial position for the company and its stakeholders."
The stake would be sold at book value. In Lion Breweries March accounts an investment is listed at 2.1 billion rupees.
The firm said it wanted to repay debt and would seek shareholder approval as money for its Indian investment was raised through a rights issue.
In the March 2011 quarter profits rose 47 percent to 313 million rupees and revenues rose 37 percent to 3.1 billion rupees.
Full year profits were up 58 percent to 1.01 billion rupees and revenues were up 42 percent to 11.2 billion rupees.
Earlier this month, Lion Brewery's parent, Ceylon Brewery said it was changing its name to Ceylon Beverage Holdings Limited.
source - www.lbo.lk
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