Hayleys Group revenue up 17% to Rs 22.6 billion

Hayleys PLC in a filing to the Colombo Stock Exchange, reported sustained performance in 1Q of 2014-15.

The Group achieved a revenue growth of 17% amounting to Rs. 22.6 billion in value terms.

All sectors in the Group maintained positive operating profits.

The Purification Sector reported a turnover of Rs. 2.4 billion and PBIT of Rs. 157.7million for 1Q 2014/15. The sector's operations faced significant challenges during the first quarter of the year, as raw material prices increased approximately 20% compared to the previous year.

The Hand Protection sector demonstrated commendable recovery from a constrained operating environment in the previous financial year. The sector reported a turnover of Rs. 3.4 billion and PBIT of Rs. 331.7 million for 1Q, 2014-15.

The sector commissioned commercial operations of a new manufacturing facility, DPL Premier Gloves Ltd. The Group's Fibre and Textile sectors which demonstrated strained performance in recent years, showed positive growth in 1Q, 2014-15, as restructuring initiatives in each of the sectors yielded results.

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Touchwood investors, creditors to meet liquidator on Oct 3

By Sunimalee Dias

Touchwood PLC Liquidator Sudath Kumar is planning to meet investors and creditors next month to work out plans towards managing their plantations and paying off debts.

Mr. Kumar pointed out that he would be convening a meeting of the ‘creditors and customers’ on October 3 at 5.00pm at the YMBA, Borella for which a newspaper advertisement would be published in all three languages tomorrow (Monday).

The meeting would, among other matters, inform the investors of the issues concerning the maintenance of the trees for which Mr. Kumar would call for tenders from a suitable company to manage the plantations.

This would ensure the investors would be aware of how their plantations were being managed and how the paybacks would be made to them in the future when their lease agreements mature. At present he noted, “People are worried on how to maintain the trees.”

Investors based overseas would be contacted through letters sent by the liquidator informing them of the prospective meeting.

In the meantime, Mr. Kumar is currently on a massive search operation to identify the lands and ascertain the assets belonging to the company during which process he has been ably assisted by some of the past employees of the company.

Former employees of Touchwood PLC have submitted their claims on salaries and have approached the liquidator to provide information on the estates their exact locations and other documents available to them. About 20 employees who had worked on the estates, a legal officer and an accounts officer had provided the information regarding the company’s assets.

Touchwood’s former legal officer Janath S. Oladoduwa had handed over the protocol of the deeds of the properties.

He had also informed Mr. Kumar that a previous legal officer who would have had more information on the protocol of the

deeds had migrated to Canada and which could now be obtained from the Land Registry.

In addition, a former driver and a former maintenance officer or Superintendent of some estates had also accompanied Mr. Kumar during his site visits in a bid to provide the necessary assistance in locating the lands.

Having identified 37 estates around the country that were sold to the customers, Touchwood PLC’s former management had stated in court they did not have the deeds of the company as a result of which Mr. Kumar has been compelled to identify the assets of the company.

It was found through his meetings with the employees that according to the Survey Plan provided to him by those who had worked on the estates each was sold in lots of 300-800 and the remaining properties would be under the company.

In a bid to ascertain what lots have been sold to customers and what belonged to the company, Mr. Kumar has authorised two notaries one in Badulla and another for the Ratnapura and Kalutara areas to obtain this information. “This information should have been available with the company,” Mr. Kumar said.

In view of the winding up case that brought to the fore over 200 Sri Lankan investors who had bought properties in the Thailand agar wood plantations, the liquidator would be employing a Thai based lawyer to carry out a file search and obtain similar information as would be carried out by the local notaries. Mr. Kumar has already identified four properties of agar wood plantations in Thailand that had been given out on lease agreements.

The next hearing of the winding up case on Touchwood would be on September 19 when the liquidator is expected to submit to court a comprehensive report on the company’s assets.www.sundaytimes.lk

LOLC unit buys finance co.

Ceylon Finance Today: Commercial Leasing and Finance, a subsidiary of Lanka Orix Leasing Company (LOLC), has purchased a 56.34% stake in BRAC Lanka Finance for Rs 578 million, and will infuse Rs 1.25 billion for loan repayment.

Commercial Leasing and Finance told the Colombo Stock Exchange that the company purchased 56.34% stake in BRAC Lanka Finance from BRAC Lanka Investments as part of the financial sector consolidation programme of the Central Bank.

Accordingly, the company had purchased 59,581,204 shares at Rs 9.70 for a total consideration of Rs 578 million.
CLC further will infuse up to Rs 1.25 billion to BRAC Lanka Finance as working capital to repay the loans obtained by the BRAC Group for the purpose.

LOLC Micro Investment Limited, a fully owned subsidiary of the LOLC group, holds a 35.02% stake in BRAC.

A mandatory offer will be announced shortly as the transaction triggers the Take Over and Mergers Code.
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HNB funds Softlogic's Rs 2.7B Odel buyout

Ceylon Finance Today: Hatton National Bank PLC announced that it made a strategic decision to finance Softlogic Group's Rs 2.7 billion investment in Odel PLC.

"Softlogic purchased the shareholdings of Odel founder Otara Gunewardene, and brothers Ajith and Ruchi Gunewardene, in a groundbreaking transaction, which gives the Group 45% ownership in Odel, paving the way for it to assume control of the fashion retailer," the bank said in a statement.

"In his vision, Softlogic Group Chairman Ashok Pathirage has focused on the conglomerate becoming one of the leading retailers in the country while being the single largest franchisee of some of the most reputed international brands in the apparel and fashion accessories market in Sri Lanka. The acquisition of Odel gives Softlogic significant lead to retail its multinational brand portfolio through Odel, an immensely popular fashion chain. 

Following this transaction, Softlogic is required to make a mandatory offer to repurchase shares from other shareholders of Odel under SEC rules," the bank said.


HNB CEO Jonathan Alles outlined the reasons which led HNB to finance a sizeable and high-profile transaction of this nature.

"It was an ideal opportunity to demonstrate the bank's commitment to the Softlogic Group, a valued relationship to the bank. This acquisition is a milestone achievement and we take considerable pride in ensuring that local entrepreneurs who are farsighted and visionary are supported fully. Therefore, the value and benefit delivered to all parties through the successful execution of this transaction is, rewarding for the bank," he said.

Softlogic Holdings PLC and Softlogic Retail (Private) Limited (a subsidiary of Softlogic Holdings PLC) on Thursday acquired a 45.16% stake of Odel PLC for over Rs 2.7 billion, with the fashion retailer's Founder Otara Gunewardene, a name synonymous with Odel, selling her entire holdings.

The two companies acquired 122,894,000 ordinary shares (61, 447, 000 shares each) at prices ranging from Rs 21.80 to Rs 22.00 per share.

Commenting on the sale, Otara Gunewardene said that she and her family members Ajit Gunewardene and Ruchi Gunewardene have disposed all their shares in Odel PLC to the Softlogic Group.

"I believe that the sale of our shares to the Softlogic Group was in the best interests of Odel PLC, and a natural progression to its continued growth. Having been nurtured from a simple retail operation from a car boot into one of the largest retail businesses in Sri Lanka during the last 25 years, Odel PLC now needs to move to the next level of retailing in order to be competitive, locally and globally. This requires the entry of a larger player with a deep commitment to retailing: which I believe can best be provided by the Softlogic Group which has a proven history of dynamism and perhaps an unrivalled track record of such operations in Sri Lanka."

She also revealed her decision to sell out of the company and said, "My decision to sell out of the company is also based on my personal desire to focus on another passion I dearly treasure in life: the pursuit of a mission to ensure the welfare of animals and the development of the Embark brand which funds such programmes. The sale of my shares in Odel PLC will hopefully provide me with more time and energy to devote to these activities in the future."

In 2012, Singapore based listed firm Parkson Retail Asia Limited purchased a 41.82% stake in the company for Rs 1.42 billion.

Pathirage told Ceylon FT that Softlogic had no immediate plans for expanding the Odel brand overseas.

Odel first opened its doors in 1989 at Dickmans Road, Colombo 4 before going on to establish its iconic flagship store at Alexandra Place in 1996.
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Sri Lanka EPF Share Portfolio’s Unrealized Profits passes Rs10Bn mark

Sep 13, 2014 (LBO) - Sri Lanka's Employee's Provident Fund’s unrealized profits of the share portfolio passed 10 billion rupees on September this year, Central Bank said in a media release.

Realized capital gains and dividends have amounted to 3.4 billion rupees to data this year.

During the first half of 2014, there were allegations levelled at the Employee Provident Fund or EPF that its share portfolio had suffered large unrealized losses during the period spanning early 2012 to early 2014 the bank said.

The EPF has long been used resource to finance a state budget deficit and is generally known as a 'captive source'. It is managed by the state.

Under the EPF law, when a contributor reaches 55 years (50 for females or when they get married) a lump sum withdrawal can be made.

“However, as always maintained by the EPF, such claims have now been proved baseless, with the unrealized losses turning into substantial unrealized gains in the second half of this year.” Central Bank was quoted in the media release.

The bank says the EPF has earned profits from its investments in Treasury Bills and Treasury Bonds over the years, with the EPF earnings of 112.3 billion rupees in 2011, 117.4 billion rupees in 2012 and 131.4 billion rupees in 2013.

The EPF’s Financial Statements for 2013 which were published in the national newspapers on 8th May 2014, are currently being audited by the Auditor General, and after finalization of the audit, the Annual Report for 2013 is due to be tabled in Parliament by October 2014.

Sri Lankan stocks hit more than 3-yr closing high

(Reuters) - Sri Lankan stocks hit a more than three-year closing high on Friday, led by select shares such as Chevron Lubricants Lanka Plc as low interest rates and continued foreign buying into risky assets buoyed sentiment, while low retail participation pushed the index sideways.

The main stock index rose 0.27 percent, or 19.43 points, to 7,218.68, its highest close since June 10, 2011, boosting market capitalisation by 8.2 billion rupees ($62.94 million) to 3.05 trillion rupees.

"Today the market was bit slow with low retail participation... They keep on investing while taking profits," said Reshan Wediwardana, a research analyst with First Capital Equities (pvt) Ltd.

Brokers said the market would continue its bull run with foreign buying, despite profit-taking in some counters by retail investors.

The index has gained 22.09 percent so far this year.

The bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 87.190 on Friday, Thomson Reuters data showed.

Stocks are deemed "overbought" above the 70-mark, signalling a reversal in the near term.

Chevron Lubricants led gains with a rise of 4.01 percent, while Seylan Bank Plc rose 5.16 percent.

Market heavyweight John Keells Holdings Plc rose 0.19 percent to 259.50 rupees.

Exchange turnover was 1.83 billion rupees ($14.05 million), more than this year's daily average of 1.24 billion rupees.

Foreign investors were net buyers of shares worth 70.9 million rupees, extending the year-to-date net foreign inflow to 10.45 billion rupees. 

($1 = 130.2800 Sri Lankan rupee) 

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

Sri Lanka stocks close up 0.27-pct

Sep 12, 2014 (LBO) - Sri Lanka's stocks ended the week in a positive territory with the ASPI crossing 7,200 mark and S&P SL20 surpassing 4,000, brokers said.

The Colombo benchmark All Share Price Index closed 19.43 points higher at 7,218.68, up 0.27 percent. The S&P SL20 closed 2.45 points higher at 4,015.63, up 0.06 percent.

Turnover was 1.83 billion rupees, down from 5.59 billion rupees a day earlier with 109 stocks closed positive against 99 negative.

The aggregate value of all off-the-floor deals represented 3 percent of the turnover.

ODEL closed 2.00 rupees higher at 24.00 rupees, attracting most number of trades during the day.

Foreign investors bought 307.13 million rupees worth shares while selling 236.25 million rupees worth shares.

Chevron Lubricants Lanka closed 13.00 rupees higher at 337.00 rupees, contributing most to the index gain.

Commercial Bank of Ceylon closed 2.60 rupees lower at 161.30 rupees.