Sunshine mulls closing struggling packaging subsidiary

Diversified conglomerate Sunshine Holdings PLC is currently evaluating the possibility of shutting down operations of its fully-owned packaging subsidiary, Sunshine Packaging Lanka Limited, by end-August, a filing to the Colombo Stock Exchange said.
“The company is continuing to evaluate restructuring options and the deployment of its assets,” Sunshine Holdings Managing Director Vish Govindasamy said.
The firm engages in the manufacture of metal containers for tea and confectionaries, mainly intended for exports. It also exports tin sheets.
The latest group financial statements carry a provision of Rs. 21.8 million for probable impairment of investment arising on accumulated loss on the subsidiary. The carrying value of the company was Rs.334.66 million, while the cost of investment was valued at Rs. 356.50 million.

A deal with the Hong Kong based Primeco Holdings Limited to bring in US$ 2 million in capital to Sunshine Packaging Lanka in return for 40 percent of the subsidiary’s shares fell through last year.
During the 2017 financial year, the packaging subsidiary saw its profit after tax falling 79.5percent year-on-year (YoY) to Rs.3.34 million. Revenue for the year fell 9.97 percent YoY to Rs. 325.81 million due to a slowdown in export orders.
Over the past 9 financial years, the highest after-tax profit recorded by the firm was Rs.16.3 million in 2016.
Sunshine Holdings acquired the subsidiary in 2005, at which point in time it was named Metal Packaging Ltd. (CW)