J eyeing Hilton?
Big dividend expected from
By Duruthu Edirimuni
The cash-rich Distilleries Company of Sri Lanka Ltd.,
(DCSL), owned by tycoon Harry Jayawardena is expected to shortly
announce dividends that company officials said would at least be
on par with that declared in the last financial year.
will be announcing dividends very soon," Damian Fernando, Finance
Director, DCSL told The Sunday Times FT, adding that the percentage
is not decided upon as yet. "It will be more or less in the
same region as last year."
has maintained a consistent dividends policy for more than 10 years
and they will definitely be announcing it within the next two weeks,
he said. His remarks came amid speculation by brokers of a hefty
dividend by the distiller which they said is believed to be accumulating
money for acquisitions.
is a cash rich company and the fact they have not released their
annual accounts for FY04 and not announced dividends indicates that
Harry Jayawardena is looking to accumulate cash for further investments,"
an analyst said.
DCSL releases its annual report in July or early August. Analysts
speculate that DCSL dividends might increase up to 70 percent since
dividends by Jayawardena's Aitken Spence conglomerate increased
by 33 percent this year.
opposed to 45 percent last year, Aitken Spence paid 60 percent dividends
this year," an analyst said. The provisional accounts DCSL
has released show that it has done extremely well, through consolidating
the profits of Sri Lanka Insurance Corporation and disposals of
their strategic investments.
net profits have risen 152 percent to Rs. 2.2 billion this year
in the FY ended March 2004 compared to last year's Rs.880 million.
The company has made Rs. 600 million through divesting their strategic
investments such as stakes in John Keells Holdings. Last year DCSL
paid a dividend of 45 percent.
also speculate that Jayawardena is eyeing a government stake of
64 percent in The Colombo Hilton which the government plans to divest.
analysts said the government will introduce 'all or none parcels'
to the market of The Colombo Hilton's owning company, Hotel Developers
Lanka Ltd., (HDL) which makes it compulsory for a buyer to purchase
the stake in its entirety.
Sri Ameresekere, Chairman, Public Enterprise Reforms Commission
(PERC) told The Sunday Times FT that PERC is working towards selling
off the government's share in HDL.
is finalising the divestiture of the government shareholding,"
Ameresekere said. He said it will be a transaction on the Colombo
Stock Exchange (CSE).
is currently facing a derivative action filed in 1990, together
with several other law suites. Ameresekere said that a committee
which was appointed by the former secretary to the Treasury and
which has been reconstituted by the new secretary, Dr. P.B. Jayasundera
is looking into the court cases.
committee has authorised the Attorney General to undertake the matters
revolving HDL and to resolve them without litigation," he said.
Brokers said they believe Jayawardena might be trying to build a
conglomerate with Distilleries as the holding company.
fact that Aitken Spence Holdings does not have a five star city
hotel has intensified speculation about Jayawardena's interest in
the Colombo Hilton. Stockbrokers said that there are a lot of interested
parties might bid for the hotel, including foreign buyers.
ago, there was speculation that John Keells might bid for Hilton,
but this was dismissed because the conglomerate already has two
city hotels; The Colombo Plaza and Trans Asia with 800 rooms in
is no need of another city hotel for John Keells," a stock
analyst remarked. Analysts said other possible contenders are Ravi
Thambiah of Renuka City Hotel and the MJF Group.
Group was very interested in Lighthouse Hotel sometime ago,"
an analyst said adding that they are keen to venture into the leisure
sector, as it has become a lucrative avenue with tourism booming
in the country.
HDL has been on the default board of the CSE since June 2001, since
it has not submitted annual reports for the past 14 years due to
the court cases.
are in danger of being delisted from the CSE because the company
has not submitted a balance sheet since 1994," a stock analyst
said. Under CSE rules listed companies must submit quarterly (interim)
and annual accounts. If they fail to do so for three years consecutively,
they will be delisted.
CSE authorities said that Hilton will not be delisted till the court
cases are resolved.