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Laugfs group to list power subsidiary shares

18 Oct 2019 - {{hitsCtrl.values.hits}}      

  • Voting shares reference price Rs.8.80; non-voting Rs.6.90
  • Listing carried out to help parent to focus on core biz


Laughs Power Limited (LPL), the renewable energy subsidiary of Laugfs group, is to list its shares on the secondary Diri Savi Board of the Colombo Stock Exchange (CSE) by way of a share introduction.


According to the listing documents filed with the CSE, the company plans to list 335 million ordinary voting shares and 52 million non-voting shares at reference prices Rs.8.80 and Rs.6.90 per share respectively.


Based on LPL’s basic and diluted earnings per share (EPS) of 44 cents for the period ended March 31, 2019, the price to earnings (P/E) ratio is 20 times at the reference price of Rs.8.80 per ordinary voting share and 15.7 times at the reference price of Rs.6.90 per non-voting share.


LPL was incorporated in 2006 as a fully owned subsidiary of Laugfs Gas PLC (LGL) for the purpose of creating a standalone entity to operate in the renewable energy space. 
LPL commissioned its first mini hydro power plant in Balangoda with a 0.5 MW capacity. LPL presently has four 100 percent owned subsidiaries that are involved in power generation via solar and mini hydro sources. 


The group’s current total capacity is 23.75 MW, out of which 20MW is generated via solar and the remainder being generated via mini hydro.


After the commissioning of the first mini hydro power plant in 2014, LPL entered a stage of rapid growth and acquired Ginigathhena Thiniyagala Mini Hydro Power (Pvt) Ltd, Anorchi Lanka (Pvt) Ltd, Iris Eco Power Lanka (Pvt) Ltd and Pams Power (Pvt) Ltd in 2015. 

All power plants acquired commenced operations in FY2017 with the exception of Pams Power Lanka (Pvt) Ltd, which is expected to commence operations in October this year. 
The commissioning of the solar plants with a capacity of 20MW in February 2017 positions Laugfs Power as one of the leading renewable power sector players in the country with the largest solar power capacity in Sri Lanka.


As of now, Laugfs Holdings Limited owns 74.02 percent of shares of LPL. State-run private sector fund, Employees’ Provident Fund (EPF) as the second largest shareholder owns 17.28 percent of the shares of the company. 


The listing is carried out according to a shareholder resolution passed in March 2018 to segregate the subsidiaries of LGL which are not related to its core business of liquefied petroleum gas.


“LGL’s presence in diversified businesses has restricted specialised energy sector investors and regional funds in investing in LGL, whereas segregation will make LGL a pure play energy business and attract the said investors to invest in LGL,” a listing document said.