Laugfs Gas PLC will be making an equity infusion to the tune of Rs.1.15 billion into its fully-owned subsidiary Laugfs Terminals Ltd to fund the latter’s project to construct the largest LPG transshipment terminal in South Asia.
Laugfs Gas PLC in a stock market filing yesterday said, Rs.130 million equity infusion, out of the total Rs.1.15 billion, was made immediately and the rest would be utilized as required.
Explaining the rationale for the equity infusion, Laugfs Gas said the LPG transshipment terminal, which is nearing completion, would create an inflow of foreign currency into the country and would allow LPG to be imported to Sri Lanka at very competitive prices, which would be beneficial to local LPG operations and the end consumer.
“Laugfs Gas PLC will reap many benefits as a result of this project both via its equity in Laugfs Terminals Ltd as well as commercially by the terminal’s operations,” the filing said.
Meanwhile, the Laugfs Gas PLC Related Party Transaction Review Committee is of the view that the transaction is on normal commercial terms and is not prejudicial to the interests of the entity and its minority shareholders. Hence, the committee is not obtaining an opinion from an independent expert prior to forming its view on the transaction.
The aggregate value of the related party transaction for the current financial year with Laugfs Terminals Ltd is Rs.1.15 billion and the aggregate value of related party transaction of Laugfs Gas PLC for the current financial year is little over Rs.5.2 billion.
According to the latest audited financial statements of Laugfs Gas PLC, 10 percent of the equity is Rs.105.5 million and 5 percent of the total assets is Rs.1.45 billion.