Melstacorp PLC, the holding company of Distilleries Company of Sri Lanka (DCSL), last week announced in a Stock Exchange filing that the Securities and Exchange Commission of Sri Lanka has approved the off-floor transfer of DCSL shares declared as a "dividend in specie" (a dividend other than in cash) to the shareholders of Melstacorp on the already announced ex-dividend date.
In an earlier filing on Mar. 27, Melstacorp announced that DCSL had, "due to a deviation with regard to the previous approval obtained from the SEC," had made an additional submission to the SEC regarding its off-floor transfer application.
In February this year, Melstacorp announced the interim dividend in specie of DCSL shares to its shareholders under which every 27 shares of Melstacorp will qualify to receive eight DCSL shares.
Since August 2016, DCSL shares have not been traded on the Colombo Stock Exchange at the request of the company to facilitate a share swap between Melstacorp and DCSL under which Melstacorp, previously a fully owned subsidiary of DCSL, became the holding company of DCSL.
In its March 27 filing, Melstacorp said it expected that the suspension of trading of DCSL shares will be lifted once the SEC approves the off-floor transaction.
Accordingly, DCSL had given an undertaking to the SEC that it will comply with the requirements of SEC’s Nov. 17, 2016, directive within a time frame agreed with the SEC.
The filing said that the failure to comply with the regulatory requirements would result in the suspension of the trading of DCSL shares on the CSE.
Under the Aug. 2016 arrangement, described as the country’s first 180 degree share swap, Melstacorp which was a fully owned subsidiary of DCSL, became DCSL’s holding company.
Under this arrangement, holders of each DCSL share were allotted four Melstacorp shares in exchange. They were also told that they will enjoy preferential allotment of DCSL shares once the arrangements are completed and DCSL will once again trade on the CSE.
For many years the cash rich DCSL, conscious of the fact that it was a player in the controversial liquor industry, has been diversifying into various other business segments.
Melstacorp is now the holding company of DCSL and these businesses.
It is expected that the DCSL shares being issued as a non-cash dividend to Melstacorp shareholders, will be uploaded to their Central Depository System (CDS) accounts shortly and DCSL will once again be on the CSE trading boards after a long absence.
In February this year, Melstacorp announced the interim dividend in specie of DCSL shares to its shareholders under which every 27 shares of Melstacorp will qualify to receive eight DCSL shares.
Since August 2016, DCSL shares have not been traded on the Colombo Stock Exchange at the request of the company to facilitate a share swap between Melstacorp and DCSL under which Melstacorp, previously a fully owned subsidiary of DCSL, became the holding company of DCSL.
In its March 27 filing, Melstacorp said it expected that the suspension of trading of DCSL shares will be lifted once the SEC approves the off-floor transaction.
Accordingly, DCSL had given an undertaking to the SEC that it will comply with the requirements of SEC’s Nov. 17, 2016, directive within a time frame agreed with the SEC.
The filing said that the failure to comply with the regulatory requirements would result in the suspension of the trading of DCSL shares on the CSE.
Under the Aug. 2016 arrangement, described as the country’s first 180 degree share swap, Melstacorp which was a fully owned subsidiary of DCSL, became DCSL’s holding company.
Under this arrangement, holders of each DCSL share were allotted four Melstacorp shares in exchange. They were also told that they will enjoy preferential allotment of DCSL shares once the arrangements are completed and DCSL will once again trade on the CSE.
For many years the cash rich DCSL, conscious of the fact that it was a player in the controversial liquor industry, has been diversifying into various other business segments.
Melstacorp is now the holding company of DCSL and these businesses.
It is expected that the DCSL shares being issued as a non-cash dividend to Melstacorp shareholders, will be uploaded to their Central Depository System (CDS) accounts shortly and DCSL will once again be on the CSE trading boards after a long absence.
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