Melstacorp to become Harry J’s ultimate holding company; seeks CSE listing

Melstacorp Limited will become a listed holding company for business tycoon Harry Jayawardena’s investments, with a 180 degree share swap between it and its current group parent Distilleries Company of Sri Lanka PLC (DCSL). “In what is believed to be Sri Lanka’s first 180-degree share swap,

Melstacorp, which is a 100 percent-owned subsidiary of DCSL PLC, will become the holding company, while DCSL PLC will become a subsidiary of Melstacorp Limited,” a DCSL statement said. Following the approvals of the shareholders and regulators, Melstacorp will become the parent company of a highly diversified group and become a listed firm in the Colombo Stock Exchange.

The shareholders of DCSL will be allotted shares in Melstacorp, in the proportion of four Melstacorp shares in exchange for every one share now held in DCSL.

“The company will hence apply to the Securities and Exchange Commission of Sri Lanka/Colombo Stock Exchange for the transfer of the DCSL shares to Melstacorp in exchange of the issue of shares in Melstacorp to DCSL shareholders. Since the swap will result in 100 percent of DCSL shares being owned by Melstacorp, the group will be issuing new DCSL shares to the public with a preferential allotment to the shareholders of Melstacorp over third party applicants in order to avoid any public float violations.

The reorganization is to free the DCSL subsidiaries, which span insurance, telecommunication, logistics, leasing, fabric manufacture, leisure, information technology, hydropower and BPO industries, from being associated with ‘distilleries’. With the introduction of the National Authority on Tobacco and Alcohol Act No.27 of 2006, using DCSL as a corporate brand became illegal although it was the abbreviated form of the holding company’s name. DCSL, which currently has a market capitalization of Rs.72 billion, was a purely liquor producing company until 1995.