By Jithendra Antonio
Contrary to the general idea of private placement which involves limited number of ‘private’ parties, business tycoon Dhammika Perera’s Vallible One boasts of 734 private placement parties, according to the company’s IPO prospectus released to the Stock Exchange yesterday.
Among the placement parties, there are a number of prominent companies, professionals and well-known individuals and investors.
The prospectus noted that these 734 shareholders hold 159.38 million shares or 14.96% stake of the company. Back in January this year, it was reported that the company raised nearly Rs.4.7 billion via private placement at Rs.25 per share which was heavily oversubscribed.
Vallibel One Chairman Dhammika Perera owns 685.3 million shares of the company while Vallibel Investments (Private) Limited and Vallibel Leisure (Private) Limited hold 91, 966, 451 and 91, 923, 063 shares respectively.
Through the IPO, the company hopes to raise Rs.532.8 million offering 21,311,870 Ordinary Voting Shares to fund the balance capital requirement of the fully owned subsidiary Greener Water Ltd which has undertaken to construct a 300 plus room five-star hotel in Negombo.
The prospectus noted that the minimum subscription is 100 shares and that the applications exceeding the minimum subscription should be in multiples of 100 shares. The issue is to open on June 21 and anticipates to close on July 8 or on the date on which the issue is oversubscribed.
Vallibel owns 51% of LB Finance PLC (LFIN), 51% of Royal Ceramics PLC (RCL) and 100% in Greener Water with a 14.99% strategic stake in Sampath Bank PLC (SAMP).
The prospectus stated that the company has also evaluated several business opportunities in the power segment and will look at acquiring both private power producers in operation and green-field development projects.
Greener Water Ltd is the leisure sector investment arm of Vallibel One. Greener Water will invest in a 382 room, five star resort to be located in Kochichikade, Negombo, and has already invested Rs.268.06 million in the 14 acre free hold land.
According to the prospectus, the initial design concept for the hotel was carried out by WATG of Singapore, one of world’s leading design consultants for the hospitality, leisure and entertainment industries.
The first stage of the architectural designs has already been completed and detailed designing in terms of M&A designs & landscape are currently in progress.
As per the prospectus, the total cost of the project is estimated at USD 50 million which is approximately Rs.5.6 billion at an exchange rate of Rs.112 per USD.
The company intends to finance a total of LKR 3 billion by utilizing proceeds from the Private Placement and funds raised through this issue.
“Out of the Rs.4.9 billion raised through the Private Placement, the Company will invest a sum of Rs.2.46 billion in the hotel project” the prospectus noted adding that Vallibel One Limited will invest by way of equity in Greener Water Ltd.
Further, it noted that directors are of the view that they are confident of raising the balance sum of Rs.2.6 billion through debt, as and when required.
The construction of the hotel is to take two years, and commercial operations to commence in early 2014. The Directors of Greener Water are Dhammika Perera (Chairman) and Tharana Gangul Thoradeniya.
The prospectus further notes that the company is looking at attracting reputed international hotel operators to carry out the resort’s management.
source - www.ft.lk
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