Sri Lanka’s USD500mn development bond oversubscribed

LBO - The issue of Sri Lanka development bonds amounting to 500 million US dollars has been oversubscribed with close to 527 million US dollars of bids received from investors.

The Central Bank has received 129.27 million dollars of bids for the two year bond and the bank has accepted 93.15 million at a floating rate of six month LIBOR plus 305.39 basis points.

The bank has also received 127.59 million dollars of bids for the three year bond and the bank has accepted 114.59 million at a floating rate of six month LIBOR plus 365.18 basis points.

117.66 million dollars of bids has been received for the four year bond and the bank has accepted 113.66 million at a floating rate of six month LIBOR plus 378.13 basis points.

The Central Bank has received 152.22 million dollars of bids for the five year bond and the bank has accepted 149.17 million at a floating rate of six month LIBOR plus 404.81 basis points.

The issue was open for subscription from 11 to 18 January 2018. It has a settlement date of 22 January 2018.

Development bonds or the treasury bonds denominated in US dollars are issued by the Public Debt Department of the Central Bank and subject to the applicable tax laws in Sri Lanka.

Selected Licensed Commercial Banks & Primary Dealers are the designated agents to purchase these bonds.

Earlier this month, Sri Lanka’s cabinet of ministers granted approval to raise up to 3 billion US dollars from development bonds in this year for loan repayments and financing of development projects.

Sri Lanka’s Hemas buys Atlas Axillia for Rs5.7bn

ECONOMYNEXT – Sri Lanka’s Hemas Holdings has bought acquired 75.1% of Atlas Axillia Co (Pvt) Ltd, a leading school and office brand, for Rs. 5.7 billion.

The existing shareholders of Atlas will retain a stake of 24.9% in the company, a stock exchange filing said.

Atlas Axillia Co., formerly known as Ceylon Pencil Company (Pvt) Ltd., will become the third largest business in the Hemas Group and will operate independently as a subsidiary of Hemas Holdings PLC.

Hemas said the entire proceeds from the April 2015 Rights issue of Rs. 4.1 billion to be invested in FMCG and Healthcare businesses have now been used with the acquisition of Atlas Axillia.

A-Sec Capital (Pvt) Ltd, the investment banking affiliate of Asia Securities (Pvt) Ltd, acted as arranger and sole advisor to the seller on the deal.

During the first quarter of 2017, Hemas allocated Rs. 1.45 billion for the construction of the new Morison PLC pharmaceutical plant.

Steven Enderby, Group Chief Executive Officer of Hemas Holdings, said Hemas Holdings is expanding its presence in the Sri Lankan consumer market by acquiring one of the most respected local brands with market leading positions for its notebooks, pens, pencils and colour products.

“Today’s consumers seek out premium, innovative and design-oriented products and Atlas has demonstrated its ability to do this repeatedly, resulting in its unique position as the most loved school and office brand,” said Enderby.

“Consumer stationery is a new and exciting category for Hemas with significant potential and we will bring the best of our consumer-focussed mindset to deliver superior value to Atlas’ many customers across the island.”

Hemas said it aims to continue to drive Atlas’ track record of sales growth; and strengthen its market leading position, highly effective lean manufacturing and enviable dividend track record.

“The group will cross-fertilise brand and marketing insights between the business and its Home and Personal care portfolio as well as deliver route to market excellence through our two significant island wide sales and distribution networks. In addition, Hemas will look to reduce funding costs and enhance talent attraction and development at Atlas.”

Nirmal Madanayake, Managing Director of Atlas Axillia Co. said Atlas Axillia is growing and were were keen to take the organisation “to the next level”.

“We went through a rigorous process to find the right partner, and we saw a great business and cultural fit with Hemas,” he said.

Atlas Axillia Co. was founded in 1959 by the Madanayake Family.

The brand “Atlas” has been voted Sri Lanka’s most loved brand 2017.

The company is the market leader in school stationery and notebooks, pens, pencils and colour products, with products retailed in over 70,000 outlets across Sri Lanka.

Atlas Axillia brands include “Atlas”, “Zebra X”, “Homerun” and “Innov8”.

The Company employs 1,300 people and operates two production facilities in Peliyagoda and Kerawalapitiya.