Financial Times

Business brief

JKH placement raises Rs 3.2 bln
John Keells Holdings Limited announced the successful placement of 24 million ordinary shares at a price of Rs. 134 each, raising US$ 34 million (Rs. 3.2 billion). "There was an unprecedented demand for the placement from institutional investors in Asia, Europe and the United States," a company statement said.

As a result, the company has several new foreign institutional shareholders. A number of these institutions are investing in Sri Lanka for the first time. The proceeds of the placement will be used to fund the recent acquisition of Asian Hotels and other investments in the pipeline.

James Finlay frees itself of debt in share ownership swap
James Finlay Group subsidiaries have swapped the ownership of the Hapugastenna and Udupussallawa regional plantations companies among themselves in a deal that helped propel Thursday's stock market turnover past Rs. 1 billion.

James Finlay & Co. announced that its totally owned subsidiary, James Finlay Plantation Holdings Limited (JFPHL) sold its majority stake of 56.8 percent and 57.7 percent in Udapussellawa Plantations Limited (UPL) and Hapugastenne Plantations Limited (HPL) respectively, to James Finlay Plantation Holdings (Lanka) Limited (JF Lanka), whose parent company is James Finaly Limited (JFL). The total consideration received on the sale amounted to Rs. 501 million (net).

The sale of the two shareholdings freed James Finlay & Co. of debt as the deal released JFC from the guarantees given by it for the borrowings of UPL and HPL amounting to Rs. 309 million.

Although during the period 1998 - 2003, the plantation companies have made some significant strides in improving productivity and quality, the level of borrowings have reached a point where the debt servicing costs have completely eroded the operating margins.

The directors of JFC decided to de- link the plantation business from the rest of the group, as at present it is unable to provide the significant amount of investment the plantation companies require. JFL has rich experience in plantation activities in Kenya, Bangladesh, Uganda and Sri Lanka and is ideally suited to take over the ownership and management of the two plantation companies.

RPC, Asia Capital sell off cross holdings
Asia Capital and Richard Pieris have sold-off the cross holdings the companies had in each other in a transaction that helped take Monday’s turnover on the Colombo bourse past the billion-rupee mark.

Asia Capital sold a nine percent state of 2.8 million shares in Richard Peiris at Rs. 100 a share while Richard Peiris sold a majority of the total of 26 million shares of Asia Capital which were traded on the day at between Rs. 14.00 - Rs. 17.75. ]
The transactions gave both companies what brokers called "healthy capital gains."

SLT to buy Lanka Bell
Sri Lanka Telecom announced it had signed an MOU for due diligence of Lanka Bell, the local fixed wireless operator it wants to acquire under its plans for expansion.

Ceylon Leather reports 1H profit
Ceylon Leather Products Limited, better known by its "DI" brand, has reported a profit after tax of Rs. 12.29 million in the six months ending September 30 as against a loss of Rs. 1.6 million in the same 2002 period.

Turnover increased to Rs. 275.9 million from the previous year's Rs. 212.7 million.
The company attributed the better performance to improved footwear sales.
Product design and development coupled with a new assembly line helped increase turnover, it said.

The company is introducing a new range of gents, ladies and children's footwear coupled with other leather goods.

People's Bank upgrades IT system
Peoples Bank has signed a contract with Silverlake System, Malaysia to install a core banking package and trade service solutions system, which will help improve its corporate, commercial services and operations at its top 60 branches and the head office.

This system is believed to increase efficiency and productivity of the business and enable it to deliver improved performance and add customer value.
It had been carefully chosen to meet the relevant customer, product and service requirement.

The solution will provide discipline to reorganize operations and processes and adopt best practices.

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