LOLC Group restructuring viewed as a global strategy to attract investors

Meanwhile ASPI ended sharply higher amid healthy turnover levels

By Hiran H.Senewiratne 

Stock market analysts said yesterday that LOLC would set up a new company to dilute its share percentage  90 percent or below in order to comply with the Colombo Stock Exchange (CSE) listing rules.

According to them, the new company would be named as LOLC Ceylon Holdings Limited and would go for an Initial Public Offering (IPO) once it is formed,

The stakes in three companies under LOLC Holdings would be transferred to the new entity. The move is expected to attract  large- scale foreign investors to support LOLC companies to grow even further.

Namely these companies would be, LOLC Finance  Commercial Leasing and Lanka LOLC Development Finance would be under the new entity. It is said that  44.8 percent stakes belonging to  LOLC Finance, 98.9 percent belonging to Commercial Leasings and 55.6 percent of Lanka LOLC Development Finance would be transferred to the new company.

The purpose of this move is to comply with the CSE listing rule where the company could hold only 90 percent or below of any listing company and also minority shareholders to invest in the company. stock market analysts said.

Amid those developments the Colombo Stock Exchange ( CSE) remained buoyant recording above average high turnover and indices on the up thanks to sustained investor interest.

The All Share Price Index (ASPI) gained by 78.61 points and the S&P SL20 Index moved up by 24.80 points. Turnover was an impressive Rs. 8.5 billion seven crossings. Those crossings were reported in Cargills, which crossed in one million shares to the tune of Rs 225 million and its sahre price traded at Rs 225, Dipped Products 325,00 shares crossed for Rs 118 million and its share price traded at Rs 365, NDB 1.5 million shares crossed for Rs 118.5 million and its share price traded at Rs 79, JKH 426,000 shares crossed for Rs 65 million and its sahre price traded at Rs 153, Hayleys 125,000 shares crossed for Rs 55 million and its share price traded at Rs 440, Renuka Holdings three million shares crossed for Rs 51 million and its share price traded at Rs 17 and Royal Ceramic 105,000 shares 21 million aand its share price traded at Rs 17.

In the retail trade top five companies that mainly contributed to the turnover were Browns Investments Rs 2.7 billion (387,000 shares traded), Expolanka Rs 1.06 billion (26.4 million shares traded), Hayleys Rs 417 million (940,000 shares traded), Dipped Products Rs 280 million (776,000 shares traded) and LOLC Rs 230 (1.4 million shares traded). During the day  545 million share volume changed hands in 46391 transactions.

Controlling shareholder, the Malaysia based investor Vijayeswaran S. Vijayaratnam bought out the Japanese investors in Asia Capital PLC for Rs. 160 million on Monday.