Industrial Asphalts (Ceylon) to divest key Peliyagoda property for Rs. 1.31bn

Industrial Asphalts (Ceylon) PLC (IAC) has announced its Board of Directors’ resolution to sell its primary investment property located in Peliyagoda for a sum of Rs. 1.3125 billion.

The move, detailed in a corporate disclosure to the Colombo Stock Exchange (CSE) on Thursday, is classified as a “major transaction” and is contingent upon shareholder and regulatory approvals.

The sale is to a designated, non-related party buyer, pending the consent of the Urban Development Authority of Sri Lanka (UDA) and the approval of IAC’s shareholders by way of a Special Resolution at a forthcoming Extraordinary General Meeting (EGM).

The property in question is a considerable land holding 350.5 perches (just over 2 acres) at New Nuge Road, Peliyagoda. It is held under a 99-year lease from the UDA, of which 58 years remain. Historically, the property was provided as compensation for land acquired from the company following the civil commotions of 1983.

The decision to divest aligns with the company’s long-stated objective of unlocking the asset’s value. In its 2024/2025 annual report, IAC’s Executive Director G. Ramanan noted that the company was evaluating the property’s full potential. The report highlighted the increasing commercial and residential interest in the Peliyagoda area, bolstered by the near-complete Port City connectivity road from the Peliyagoda interchange, which is expected to open in 2025 and significantly enhance property values.

This sale represents a strategic pivot for IAC, which operates as an investment holding company. The management has expressed its intention to “pursue a very aggressive investment strategy primarily in public equities,” leveraging its deep expertise in the field. The divestment of this large, illiquid real estate asset will free up considerable capital to fuel this equity-focused strategy. The sale price of Rs. 1.3125 billion is closely aligned with the property’s latest fair valuation of Rs. 1.325 billion as of March 31, 2025. This property is the company’s single largest asset, accounting for over 81 percent of its total assets of Rs. 1.626 billion.

Industrial Asphalts (Ceylon) PLC has demonstrated strong recent performance, providing a solid foundation for this strategic move.

The company’s shareholding structure is concentrated with the top investor also leading its management. As of 31st of March 2025, Govindasamy held 1,800,693,010 shares (48.03 percent).  Ramanan is also the company’s Executive Director. Further, Senthilverl Holdings (Pvt) Ltd held 176,510,524 shares (4.71 percent) in the company  followed by B. Srikumar with 160,000,000 shares (4.27 percent). (NF)