In what appears to be part of a group restructuring exercise, Ceylon Biscuits Limited, widely known as CBL, sold its direct holding in Convenience Foods Lanka PLC, one of its subsidiaries, and listed it under the CBL group’s investment holding company.
Convenience Foods Lanka PLC, the manufacturers of popular soya meat brand Lanka Soy, told the Colombo Stock Exchange that CBL Investments Limited purchased all shares held by CBL.
Until Monday, CBL held 1,962,977 shares or a 71.381 percent stake in Convenience Foods before the former sold its entire stake to CBL Investments Limited in a deal valued at Rs.618.3 million.
The deal valued Convenience Foods’ share at Rs.315—a discount of about 15 percent to the trading price. The share was trading yesterday around Rs.368.10.
The transaction does not trigger a mandatory offer for the balance stake in the company because the deal was only a transfer of shares between the companies in the same group. In fact, CBL is also a subsidiary of CBL Investments Limited.
The other large shareholders of Convenience Foods include Dawi Investment Trust (Pvt.) Ltd with 6.37 percent, C.D. Kohombanwickrama with 6.19 percent and H.W.M. Woodward with a 2.57 percent stake.
Convenience Foods is the only listed subsidiary under the privately held CBL group, famed for its Munchee biscuits.
The CBL group is the largest confectionary exporter in Sri Lanka, exporting its products to over 60 markets.
CBL bought Convenience Foods from Vanik Incorporation about 15 years ago when Lanka Soy was one of the most popular brands in the country.
For the quarter ended on June 30, 2017, Convenience Foods posted a net profit of Rs.22.8 million or Rs.8.30 a share, up from Rs.7.9 million or Rs.2.85 a share during the corresponding period last year.
Revenue for the period was Rs.388.3 million compared to Rs.365.4 million a year ago.