Wednesday, February 20, 2013

RCL sells 51% stake in Asia Siyake to Lanka Commodity Brokers for Rs. 371 m

Royal Ceramics Plc (RCL) has decided to sell its 51% stake in Asia Siyaka Commodities Ltd., to Lanka Commodity Brokers for Rs. 371 million, above Rs. 34 million from its original purchase price early last year.

  The sale of the stake will be on a staggered basis between March 5 and end June as the SEC had imposed some limitations given the fact that Asiya Siyaka got listed via an introduction late last year.

RCL bought the Asia Siyaka stake amounting to 132.6 million shares in April last year for Rs. 337.6 million. The venture also has a whole owned warehousing facility. Asia bought 100% stake of Produce Brokers Ltd., in October for Rs. 7.1 million.

 Despite the purchase originally with perceived synergies given RCL’s connections with plantations-rich Hayleys Plc, the new acquisition hadn’t benefitted as envisaged. The exit will benefit RCL considerably going forward apart from commodity broking not being part of its core business.

 As at 31 December 2012, for nine moths Asia’s revenue was Rs. 237.7 million whilst net profit was Rs. 56.8 million. Administrative expenses amounted to Rs. 184 million and bottom line had been helped by finance income of Rs. 79 million.

 Tea broking industry analysts said acquisition of Asia Siyaka will consolidate Lanka Commodities’ position to be a leading contender.

 Set up in July 2003, Lanka Commodity Brokers has been regarded as the most aggressive with its weekly quantities increasing continuously. As per its web site, the Company approximately has 23.5% share of the weekly Main Sale High and Medium grown quantities and approximately 17% share of total weekly Low Grown catalogues, ahead of some established Brokers. On average, it offers approximately 1800-2200 lots per week, comprising of nearly 1.2 million kgs/week.

 The principal activities of the Company are tea, rubber and sundry produce broking and providing financial accommodation for the produce suppliers in respect of the above services.

 Lanka Commodity’s main shareholders include some of the leading names in plantation industry. They comprise Neptune Holdings (17.71%), Chadstone Ltd., (17.71%), Almar Trading (14.74%), Sunshine Holdings (14.71%), Meezan Securities (15%), ESOP – Shares held on Trust by ESJAY Associates                (16.55%), and  S.Sirisena (8.37%).

 The Directors of the Company are: Dr. Anura Ekanayake, Mustha Ahamed, Ihtisham Meezan Mohideen, Sarath Sirisena, Amanda Weerasinghe, Mohamed Malik Waffa and Senaka Amarasuriya.

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