Alumex to use IPO proceeds to set up powder coating plant

20 February 2014 07:56 am - 0 - {{hitsCtrl.values.hits}}

A A A

The Hayleys group subsidiary Alumex Limited yesterday announced its plans for an Rs.838 million Initial Public Offering (IPO), to finance a capital requirement to set up a powder coating plant and also to benefit from a government tax discount.

Accordingly, Alumex would offer 59.9 million ordinary voting shares at Rs.14 each to be listed on the Diri Savi Board of the Colombo Stock Exchange, comprising of an offer for a subscription tranche of 17.9 million shares and an offer for sale of 42 million shares.The minimum subscription has been set at 100 shares (Rs.1400).

According to the Alumex prospectus, the acquisition of the new powder coating plant would double the company’s existing powder coating capacity of 1800 metric tons per annum to cater to the significant increase in demand. It also plans to invest in dye manufacturing equipment.Funds amounting to Rs.250 million raised via the issue of 17.9 million new shares would be utilized to finance the proposed production capacity expansion in the powder coating facility of Alumex.

Further, through the issue, the company will take advantage of the reduced rate of corporate tax for the period commencing from the year of assessment 2013/14 to 2015/16 in terms of the Inland Revenue Act.This states that any company which lists its shares between April 1, 2013 and April 1, 2014 is entitled for a tax concession of 50 percent for the year of assessment and the following two years.However, NDB Investment Bank Investment Manager Navodana Alahendra explained that in order to be eligible for this concession a company is required to issue a minimum of 20 percent to the public through the offer.

“This 20 percent comes to about Rs.800 million but they only require about Rs.250 million for the company. As the financial advisors, we had to structure the issue with an offer for sale component, where the existing shareholders will sell down,” he said.

Rs.250 million would be from the offer for subscription where the company will issue new shares and the balance Rs.588 million will be through a divestment of the existing shareholders.

Currently Hayleys has a 60 percent stake in Alumex and as a group policy has decided not to divest below 51 percent. Accordingly, Hayleys will divest 18 million shares and the balance strategic investors will be divesting proportionately to accommodate the 42 million shares required for the offer for sale.

Alumex will be opening the IPO on March 6, 2014 and according to Alahendra, based on the current demand, the company is planning to close the issue on the same day.

“The IPO is most likely to be oversubscribed on the same day,” he added.After the listing the company would have a market capitalization of Rs.4.2 billion.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Alumex to use IPO proceeds to set up powder coating plant

Comments - 0

Add comment

RECOMMENDED

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Western purple-faced langurs see blue!

Most Viewed in News

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

Belgian traveller scammed in Kalutara

23 year old youth ends up having his testicles removed

New Visa procedure implemented

April 15 declared a government holiday

Street food vendor arrested for verbally harassing foreigner

MIRROR CRICKET

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings

Chamodi, Dewmi spins Sri Lanka U19 Women to big win

TODAY'S HEADLINES

Wild elephants pull down 16 telephone poles

Middleman arrested for price gouging at Kalutara eatery

Bondholders’ agreement delay won’t hinder IMF third tranche payout: Dr. Coomaraswamy

Party leaders to shoot down MPs request for concessionary duty free vehicle permits

Hardik fined Rs 12 lakh for violating IPL code of conduct after win over Punjab Kings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings