Sri Lanka tea prices rise at Colombo auction

ECONOMYNEXT – Sri Lankan tea prices rose at this week’s Colombo auction with some types grown on plantation company estates on the western slopes of the central hills up by Rs.20-30 a kilo on better quality, brokers said.

Forbes & Walker Tea Brokers said there was “excellent demand” for the total of 6.0 million kilos came under the hammer this week.

There was “fair demand” for low grown teas, which make up the bulk of the crop, with prices of most varieties up or steady, the brokers said.

The overall quality of teas, from both company estates on the Western and Eastern planting districts, showed an improvement and consequently rose in price by Rs.20 a kilo and more as the sale progressed.

“Western BOPs where quality was improved gained Rs.20-30 per kilo and more whilst the others were firm and dearer to a lesser extent,” the brokers said. “Corresponding BOPFs appreciated up to Rs.50 per kilo where quality was improved whilst the others were firm and dearer to a lesser extent.”

Some tea from the eastern slopes also rose by Rs.10-20 a kilo, Forbes & Walker Tea Brokers said.

“This week’s appreciation in prices is indeed encouraging although in no way would offset the increased cost following the sharp decline in volumes particularly in respect of estates in the High and Medium Grown elevations manufacturing small leaf teas,” .

Sri Lanka's Agalawatte Plantations controlling stake traded

ECONOMYNEXT - A controlling 60.8 percent stake in Agalawatte Plantations Plc, a unit of Sri Lanka privately held Mackwoods group was traded on the Colombo Stock Exchange Thursday in deal valued at a little over 300 million rupees.

Until the sale Mackwoods Plantations (Pvt) Ltd held 60 percent of the firm.

Members of the controlling Nonis family have been involved in a series of legal battles for control alleging mis-management and oppression.

Key shareholders petitioned court to hold a extra-ordinary general meeting and appoint directors, alleging that Chairman Chris Nonis was siphoning money off to the UK through fictitious marketing campaigns.

Nonis has denied the charges.

Agalawatte Plantations is a privatized plantations company which also grows palm oil.

Sri Lanka Browns group sells hydropower unit for Rs519mn

ECONOMYNEXT – Sri Lanka’s Browns Capital group said it had sold a 68% stake in a hydropower subsidiary to Lotus Renewable Energy (Pvt.) Ltd. for Rs519 million on the Colombo stock exchange.

The deal to sell control of Browns Hydro Power PLC was done at Rs7 per share, a stock exchange filing said.

Browns group subsidiaries, Browns Power Holdings (Pvt.) Ltd and Pussellawa Plantations Ltd, sold their stakes of 33.96% each in Browns Hydro Power PLC.

Mackwoods battle takes new turn with Sri Lanka's Agalawatte Plantations sale

ECONOMYNEXT - A battle among shareholders of privately held Mackwoods group took a new turn with the sale of a controlling stake in Agalawatte Plantations Plc, to Sri Lanka's Browns group.

Browns said in a stock exchange filing that it bought 60 a percent stake of APL made up of 15.2 million from Mackwoods Plantations (Pvt) Ltd, for 20 rupees a share on July 14.

The Mackwoods group has been embroiled in litigation after some members of the controlling Nonis family went to court alleging that Chairman Chris Nonis was oppressing them and mis-managing the group, whose ultimate holding company was Mackwoods Securities (Pvt) Ltd.

Agalawatte Plantations said in a statement that the "transaction was formally authorised and effected by the shareholders of Mackwoods Plantations (Pvt) Ltd."

Nirmalie Samaratunga, a director of Mackwoods Plantations (Pvt) Ltd, said Thursday that she had not been given notice of any board meeting to approve the share sale and she was consulting legal opinion.

There had been a series of cases involving the group filed by opposing factions.

Earlier in the month, some shareholders won a court order to hold an extraordinary general meeting of Mackwoods Securities (Pvt) Ltd in a bid to appoint three directors to represent their interests.

The shareholders alleged that Chris Nonis was siphoning off money in the name of conducting international promotions through a company called APL Teas, which was owned by him and one sister and was actually not a subsidiary of APL.

The petitioner told court that another company called Taprospa Resorts (Pvt) Ltd, which had interests in leisure, was a 100 percent owned unit of Agalawatte Plantations until 2011.

The petition alleged that Taprospa Resorts (Pvt) Ltd, had later become a 60 percent owned unit of a company called Taprospa Holdings Ltd which was 99 percent owned by Chris Nonis and it had happened without the knowledge of the board.

Nonis denying the allegations said in statement that there were attempts to strip assets of the group by hostile corporate raiders who were making "wild and baseless allegations and are engaged in a vicious smear campaign against the Company and its Chairman."

Sri Lanka Browns Group buys Agalawatte Plantations

ECONOMYNEXT – Sri Lanka’s Browns Group has bought control of Agalawatte Plantations from Mackwoods Group for Rs304 million, a stock exchange filing said.

The statement from Mackwoods Plantations said it sold 15.2 million shares of Agalawatte Plantations or a 60.80% stake to Browns at Rs20 a share.

Agalawatte Plantations said falling commodity prices had made a "severe financial impact" and it was felt "prudent and timely" to sell out.

The full statement is reproduced below:

Agalawatte Plantations PLC sold to the Browns Group

The controlling interest of Agalawatte Plantations PLC– a public quoted company - was sold this afternoon (14th July 2016).

As has also been widely reported, domestically and internationally, the global commodities crash in the past few years, the Russian Crisis and subsequent depreciation of the Rouble, reduced the buying power of Russia and CIS countries. This was further aggravated by the oil price crash, which reduced the buying power of the Middle East Countries, and in addition substantially impacted the rubber industry, as the falling oil price allows for synthetic rubber substitutes to replace natural rubber. This has aggravated the strain in particular for those plantations Companies with predominantly rubber exposure, including Agalawatte Plantations PLC.

The sale of 60.8 % of the shares of Agalawatte Plantations PLC held by Mackwoods Plantations (Pvt) Ltd. was auctioned on the trading floor of the Colombo Stock Exchange. The transaction was formally authorised and effected by the shareholders of Mackwoods Plantations (Pvt) Ltd. The shares, worth Rs. 304,000,000/-, were purchased by the Browns Group.

Given the severe financial impact of the commodities crisis on Agalawatte Plantations PLC, it was felt both prudent and timely to divest its shares to the Browns Group, which is already in the Plantation Sector of Sri Lanka.

Sri Lanka central bank rejects 03, 06-month Treasury Bill bids

ECONOMYNEXT - Sri Lanka’s Central Bank rejected bids for 03-month and 06-month Treasury Bills at Wednesday’s auction, the Public Debt Department said.

The one year Treasury Bill Yield fell 07 basis points to 10.49%, a statement said. The bank offered 17.5 billion rupees worth of one year bills and accepted bids of 7.5 billion rupees.

It received total bids of 54 billion rupees at the auction .

Sri Lankan shares end flat; blue chips down

Reuters: Sri Lankan shares ended steady on Thursday, after it hit a near three-week closing high in the previous session, as investors sold blue chip shares such as Ceylon Tobacco Company Plc and John Keells Holdings Plc .

The benchmark Colombo stock index ended down 0.01 percent at 6,401.90. It gained 1.3 percent last week in its first weekly gain in four.

"There was profit-taking in some blue chip companies," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

The bourse touched a near three-week high on Wednesday due to positive sentiment after Sri Lanka raised $1.5 billion in its first sale of dual-tranche eurobonds earlier this week, as over $5.5 billion in offers for the issue showed global investors were bullish about the prospects of the $82 billion economy.

After the bond deal, yields in local T-bill auction fell along with the 364-day T-bill rates at Wednesday's auction for the first time since April 15.

Turnover stood at 1.06 billion rupees ($7.27 million), well above this year's daily average of around 742.7 million rupees.

Overseas investors, who were net sellers for the first time in seven sessions, sold a net 3.2 million rupees worth of shares, extending the year-to-date net foreign outflow to 5.08 billion rupees worth of equities.

Shares stumbled recently and hit their lowest close since April 7 on Monday, after losing in 10 of 11 trading sessions, on worries over capital gains tax on stocks, high-interest rates and policy uncertainty.

Shares in Ceylon Tobacco Company Plc fell as much as 1.96 percent while conglomerate John Keells Holdings Plc dropped as much as 0.64 percent and Aitken Spence Plc slipped as much as 2.03 percent.

($1 = 145.7600 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)