Kuruwita shareholders approve delisting

A majority of the shareholders of Kuruwita Textile Mills PLC last week approved a delisting move proposed by the Board of Directors.

The company said that 97% of shareholders present by person and proxy voted in favour of the delisting move at the EGM held on 9 April.

The delisting is at Rs. 30 per share which the Directors have arranged to buy the shares of any shareholder who wishes to sell their shares. Brandix Textile Holdings is the majority shareowner with a 77.7% stake directly and via related parties 80.26%.

As at 31 March 2013, the company had 1,217 shareholders of whom, 1,034 or 85% held between 1 and 1,000 shares accounting for 0.75% and a further 148 shareholders holding between 1001 and 10,000 shares or a 1.99% stake. Other major shareholders include JB Cocoshell (5.22%), L.P. Hapangama (3.6%), and T. Al Nakib (3.48%).

Kuruwita last traded on 13 February 2013 at Rs. 20.90.

In its original announcement, the Kuruwita Board said: “Over the last four years management of Kuruwita Textiles has taken several steps to turn around the company and return to profitability. However, these steps have not been successful and the net assets per share of the company reduced from Rs. 43.09 as at 31 March 2011 to Rs. 24.10 as at 31 December 2013.”

Retained loss as at 31 December 2013 was Rs. 409.5 million at group level and Rs. 249.3 million at company level.

In the quarter ended 31 December 2013, the company witnessed a profit for the period in keeping with the historical trend of seasonality. However revenue recorded a decline of 21% during the quarter in comparison to the same quarter of FY 12/13 pointing to the fact that performance is not up to the desired mark. Revenue for the nine month period two recorded a decline of 10% to Rs. 5.3 billion.

Gross profit for the period was Rs. 133 million down 12% in comparison to the same period for FY 12/13. However for the nine month period the company had fared worse off in comparison to the same period of FY 12/13 recording a loss of Rs. 98 million in comparison to a profit of Rs. 224 million.

Reductions in semi-variable costs accounted under administrative and distribution expenses by 53% enabled the company to improve its operating and net profit figures in comparison to the same period of FY 12/13. However on a cumulative basis the company recorded a net loss of Rs. 448 million for the nine month period to December 2013 in comparison to a net loss of Rs. 133 million as at December 2012. This was an increase in the loss in excess of three fold.

These continuous negative results reported, have resulted in the net assets of the company eroding continuously, creating a reduction in share holder wealth. Net assets per share which stood at Rs. 43.09 in March 2011 declined to Rs. 24.10 over the corresponding period due to the losses recorded. This was in spite of a number of changes made by the management and steps taken, in their attempt to turn around the company.

The Board of Directors of Kuruwita Textile Mills PLC comprises of M.A. Omar (Chairman), G. Bandaranayake (Managing Director), U. Liyanage, F. Omar, H.A. Ariyaratne (nominee of DFCC) and H. Premaratne.
www.ft.lk

Sri Lanka stocks close at more than two-month high on blue chips, inflows

(Reuters) - The Sri Lankan share index rose to a more than two-month high on Wednesday, led by blue chips and foreign inflows.

The main stock index ended up 0.44 percent at 6,118.85, its highest close since Feb. 11.

Though the day's turnover at 745.2 million rupees ($5.7 million) was less than this year's daily average of 980.6 million rupees, foreign buying accounted for 64.6 percent of turnover.

Many local investors were in a holiday mood as the stock and currency markets are trading only on Wednesday and Thursday this week due to the Sinhala-Tamil new year, followed by Good Friday.

The bourse saw net foreign inflows for a sixth straight session. Offshore investors bought 276.3 million rupees worth of stocks, though they have net sold 8.04 billion rupees of shares so far this year.

Top conglomerate John Keells Holdings, which accounted for around 40 percent of the day's turnover, ended steady at 238 rupees. Commercial Bank of Ceylon, the top listed private lender, edged up 0.16 percent to 127 rupees.

Analysts said the outlook was still positive due to prevailing lower interest rates.

Brokers said the stock market, valued at $19.62 billion as of Wednesday's close, is gradually attracting investors who are looking for higher returns than the deposit rates of around 6-6.5 percent offered by banks and financial companies.

Analysts, however, expect foreigners could shift from the island nation's risky assets if Sri Lanka does not cooperate in an international probe conducted by the Office of the United Nations' High Commissioner for Human Rights on the country's alleged war crimes and human rights abuses.

Sri Lanka's foreign minister said last week that the country would not cooperate with the inquiry.

The bourse has seen 3.9 billion rupees in outflows since a UN resolution voted for an international probe.

($1 = 130.6000 Sri Lanka Rupees) 

(Reporting by Shihar Aneez in Colombo; Editing by Prateek Chatterjee)

Jefferies to Distribute JB Securities Equity Research on Companies in Sri Lanka

NEW YORK & LONDON & HONG KONG & COLOMBO, Sri Lanka, Apr 13, 2014 (BUSINESS WIRE) -- Jefferies today announced that it is entering into a cooperation agreement with JB Securities (Pvt) Limited to distribute JB Securities equity research on companies in Sri Lanka on a co-branded basis to Jefferies’ global institutional client base.

JB Securities provides comprehensive equities research and stock brokering services in Sri Lanka. The firm is a member of the Colombo Stock Exchange and is part of the Jafferjee Brothers Group.

Over the last year, Jefferies has formed similar alliances in South Korea, Australia, Malaysia, Indonesia and Thailand to broaden Jefferies' equity research offering to its global client base. These alliances now include more than 50 analysts covering some 315 companies in the region.

Michael Alexander, Chief Executive Officer of Jefferies Asia, commented, “We are pleased to align with JB Securities as we continue to grow our Pan-Asian equities business to better serve our diverse and global client base. We continue to expand our business across the region with a focus on delivering top-tier and targeted research coupled with superior execution and distribution.”

“This alliance demonstrates Jefferies’ strong commitment to serving our clients with best-in-class research and execution capabilities globally," added Peter Forlenza, Global Head of Equities at Jefferies.

Murtaza Jafferjee, Chairman and CEO of JB Securities, commented, “We are excited to partner with Jefferies to deliver our research product to a broader institutional client base.”

Not including the research alliances, Jefferies’ global equity research business consists of 138 analysts covering nearly 1,750 stocks from research centers in London, Hong Kong, Mumbai, Singapore, Tokyo, Houston, Nashville, New York and San Francisco. The firm’s global coverage includes Economics & Strategy, Business Services, Consumer, Energy, Financial Services, Insurance, Healthcare, Industrials, Internet and Interactive Entertainment, Maritime, Media, Metals & Mining, MLPs, REITs, Technology, Telecommunications, Travel & Leisure and Utilities.

To learn more about Jefferies equity research capabilities or to receive Jefferies research, please contact your Jefferies representative.

Jefferies, the global investment banking firm focused on serving clients for over 50 years, is a leader in providing insight, expertise and execution to investors, companies and governments. The firm provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income, foreign exchange, futures and commodities, as well as wealth management, in the Americas, Europe and Asia. Jefferies Group LLC is a wholly-owned subsidiary of Leucadia National Corporation LUK -2.27% , a diversified holding company.

SOURCE: Jefferies

Jefferies
Richard Khaleel, +1-212-284-2556
rkhaleel@jefferies.com
or
Sara-Louise Boyes, + 44 (0)20 7029 8022
sboyes@jefferies.com

Vehicle registration records marginal growth

Vehicle registrations during the first two months of this year recorded a marginal growth compared to last year according to motor traders.

The new and reconditioned motor car and heavy duty vehicle sales posted a three percent growth during January to February this year compared to the corresponding period last year.

The growth in vehicle sales has been marginal due to the high duty on many categories of vehicles which resulted in a drop in sales. The sale of many categories of reconditioned vehicles have outdone new vehicles.

The sale of dual purpose new vehicles dropped 18 percent to 139 units from 169 last year during the first two months of this year.

Dual purpose reconditioned vehicle sales slumped 50 percent to 333 from 668 last year. The number of new motor lorries declined 39 percent to 440 units from 721 last year.

The number of reconditioned motor lorries grew four percent to 139 from 134 last year. The sale of new buses increased 0.4 percent this year to 266 units from 265 last year. While reconditioned buses declined 34 percent to 23 units this year from 35 last year.

Reconditioned motor cycles recorded the highest growth during the first two months of this year with a 266 percent increase to 963 units from 263 last year. The number of new motor cycles increased by 13 percent to 29,015 this year from 25,590 last year. Reconditioned motor cars grew 98 percent to 2,482 from 1,256 last year. New vehicles of this segment rose 32 percent to 1,539 from 1,170 last year.

Ceylon Motor Traders Association, President Tilak Gunasekera said that the 10 percent tax on CIF value charged on any vehicle imported on permits and transferred at the time of registration is an additional tax and is not a healthy move.
http://www.sundayobserver.lk/2014/04/13/fin03.asp

Sri Lanka US$50mn private equity fund gets IFC cash

Apr 12, 2014 (LBO) - International Finance Corporation, a World Bank arm said it will invest 10 million US dollars in Emerald Sri Lanka Fund I, a 50 million US dollar private equity fund focused on the island.

The fund will be run NDB Zephyr Partners, a joint venture between by New York based Zephyr Management and Colombo base NDB Bank group.

Emerald Sri Lanka Fund I Limited will invest in small and mid-sized businesses seeking growth.

"The Fund will take significant minority stakes in 10-12 well run companies," IFC said in a disclosure.

"The Fund will add value by providing support and expertise on capital structures, financial reporting, business development, management development, corporate governance, strategy etc. to the portfolio companies."

Sri Lanka Telecom to pay IT firm with interest

Apr 12, 2014 (LBO) - Sri Lanka Telecom Plc, said it will pay Just In Time Holdings (Pvt) Ltd, which had supplied IPTV equipment, 673 million rupees, which includes legal costs and 171 million rupees in interest.

Sri Lanka Telecom will make an immediate payment of 502 million rupees for set top boxes and legal costs, as part of an out of court settlement involving a 2007/2008 contract, the firm said in a stock exchange filing.

Interest of 171.1 million rupees will be paid in six instalments.

Just in Time had won an arbitration award in their favour, but had also been involved in civil litigation. Following the out of court settlement, civil litigation would be withdrawn.

Related News:

http://www.cse.lk/cmt/upload_cse_announcements/5651397215420_.pdf

Sri Lanka's Bairaha, Crysbro in Rs.16bn feed mill

Apr 12, 2014 (LBO) - Sri Lanka's Bairaha Farms Plc, said it plans to take a 45 percent stake in Fortune Agro Industries (Pvt) Ltd, a 1.65 billion rupee feed mill venture with Farms Pride (Pvt) Ltd, another poultry group.

The project has received preliminary approval from Sri Lanka's Board of Investment for a 7-year tax holiday and to import or buy capital goods free of import duty, though the agreement has not yet been signed, the firm said in a stock exchange filing.

Farms Pride was already partnering Bairaha in Fortune G-P Farms (Lanka) Ltd, which has a 50 percent share in the country's broiler breeder parent chicks.

Farms Pride sells products under the 'Crybro' brand, according to its website, will have 45 percent of the company.

Fortune Agro Industries (Pvt) Ltd will have animal feed manufacturing and post harvest storage facilities.

Related News:

http://www.cse.lk/cmt/upload_cse_announcements/8551397196995_.pdf