Crisis-hit Dankotuwa Porcelain found new investors this week after its board of directors signed an agreement with Environmental Resources Investments (ERI) and its subsidiary Ceylon Leather Products (CLP) to sell a 66.6% stake in the company.
The company which produces tableware for ‘fine dining’ and exports mainly to Europe has been grappling with a costly workforce, restive labour and rising debt since 1990. Last week it reached agreement with unions on the need to restructure and bring in a new investor.
According to an announcement on Thursday to the Colombo Stock Exchange, the ERI-CLP consortium has agreed to pay Rs 433.4 million at Rs 9 per share for the Dankotuwa stake. The deal is subject to shareholder and regulatory approval.
The main investor in Dankotuwa now is a consortium of Japanese companies. Brokers said the new investor (ERI-CLP) would be getting majority control at a discount because the stock was last transacted at Rs 21 a share on Thursday.
ERI which also has a stake in the platinum mining industry in South Africa, has been making waves in the local market during the past two to three years as an investment company.
Last year it acquired Walker & Greig and the CLP, on June 3 it took a majority stake in the South Asia Textile Industries which has a garment factory on 76 acres at the former Pugoda mills property. It has smaller stakes in other companies.