Footwear subsidiary shareholders approve Lanka Century Investments share swap deal

Shareholders of Ceylon Leather Products PLC (CLP) have approved a share swap arrangement involving its parent company Lanka Century Investment PLC (LCI) at an Extraordinary General Meeting held yesterday. 

LCI in July said it would be offering minority shareholders of its subsidiary CLP a share swap deal as a part of LIC’s efforts to streamline the operational and ownership structures of its leather and footwear manufacturing subsidiary

Both LIC and CLP said their respective boards of directors had approved this arrangement.

LIC, which owns 95.53 percent of the shares in CLP, has offered to buy the remaining 1.53 million shares in CLP. In return, LIC will offer 5.0077 new shares in LIC for each share minority shareholders in CLP sold to LIC under this arrangement, for a total of 7.67 million new LIC shares.

LCI has determined the cash value of LCI shares to be Rs. 19.65 per share. The share closed at Rs.13 yesterday.

LCI said that any CLP minority shareholders, who dissents to the agreement, will be offered Rs.68.42 per share, based on the volume weighted average price of CLP trades for the past 3 months. CLP share closed at Rs.61 yesterday.

LCI will apply for CLP to be delisted from the Colombo Stock Exchange (CSE) after the completion of the arrangement, since it will be unable to meet the minimum public shareholding regulation for continuous listing at CSE, and since past attempts to adhere to the regulation were unsuccessful.
Meanwhile, LCI’s public shareholding, which is currently at 16.12 percent, will improve to 17.92 percent following the arrangement.

The top 3 minority shareholders in CLP are Richard Pieris Group Chairman Dr. Sena Yaddehige with 0.32 percent of shares, Cricketer Kumar Sangakkara with 0.17 percent of shares, and Lalan Group Chairman Lalith Hapangama with 0.16 percent of shares.

Ajith Devasurendra’s Taprobane Group owns 83.11 percent of shares in LIC, while Ceylinco General Insurance Limited owns 2.70 percent of shares, and Carlines Holdings (Pvt) Ltd owns 1.67 percent of shares of the company.