15th February 1998


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Sale goes on despite strike

The estates have been crippled because Mr. T has called out to his followers to stick to their demands for a wage hike.

Right now, the impact of this is negligible but should the strike continue

the implications will be many.

And that is why the powers that be last week wanted the Initial Primary offer of a plantation sector company postponed until the dispute is settled.

But finally they decided to proceed and, judging by the response, the decision was right...

Devalued aid

If you thought that the currency crisis in South East Asia may not affect us directly, you would be wrong.

At least two countries that promised aid in the form of grants and loans have had their currencies devalued significantly over the past few weeks.

We will still get our aid, those governments have assured Colombo, but it would be so devalued that, in real terms, it wouldn't amount to much...

No joke, itís coming

Last week, there were frantic appeals to the Treasury boys to reconsider the introduction of the Goods and Services Tax (GST) on April Fools Day.

An overnight transition would create chaos some thought and pleaded for a phased introduction.

But, the final decision was that the Tax would be enforced, come midnight on the thirty first day of March...

ETF to drop Maturata

By Asantha Sirimanne

The Employees' Trust Fund (ETF), the present owners of Maturata Plantations are now considering the possibility of disposing of the investment, The Sunday Times Business learns.

The ETF bought the plantations company last year against severe criticism from the private sector which described the purchase as a form of re-privatisation.

At the time the ETF came under the Labour Ministry. However it has since been moved to the Finance Ministry and its Board reconstituted.

The ETF also bought Lanka Salt Ltd, which owns the salterns in Hambantota. Still no decision has been made to dispose of Lanka Salt.

Maturata Plantations is now managed by CIC which was the managing agent when the company was in state hands. ETF sources say the sale will be carried out in a transparent manner with the approval of the relevant authorities.

When Kotagala Plantations was re-sold by George Steuarts group within a short time after it purchased the company, there was a storm of protest.

"We will probably advertise or invite approved managing agents who are already managing plantations to submit bids," an ETF official said.

Large mutual funds such as unit trusts and the ETF, which manage third party funds, do not generally purchase controlling stakes in a company,seek board positions or involve themselves in management of investee companies.

Unless such safeguards are built in, administrators of mutual funds are able to appoint political or private favourites to boards of companies, or wrest control of companies using third party funds.

At one time the ETF had a policy of not buying more than 10 per cent of an investee company and not investing in private un-quoted companies. With the ETF coming under the Finance Ministry a new investment policy had again been put in place.

Shop till you drop - in Bangkok

Exotic Thailand has always been an attractive shopping destination for many Sri Lankans. The devaluation of the bhat has meant a cut in hotel rates, low price of goods tempting many a Lankan to make a hasty trip to Bangkok to snap up the bargains.

The Asian currency crisis also hit other favourite Sri Lankan haunts like Singapore and Malaysia. Local travel agents report that frequent travellers and many first-timers are flocking to these destinations making use of the cheap rates on offer.

Travel agents say since December 1997, they have seen an increase of nearly 40-50 per cent of traffic moving to these destinations. Airlines too are reporting heavy bookings to these destinations.

Gabo Travels said their clients have an option of staying at Indra Regent Hotel or Manhattan Hotel in Bangkok for a mere US$ 10 on a twin sharing basis. In Singapore they can stay at either Asia Hotel or Garden Hotel for the same price.

"These are special rates for Sri Lankans," Deputy General Manager Gabo Travels, Faris Deen said. "Tours to Phuket and Chang Mai in Thailand, and a trip to Penang or a cruise around Singapore harbour are also available at special rates," he said.

Manager Marketing and Tours Thomas Cook, Amitha Peiris said they too are offering tours at reasonable rates to Thailand and Malaysia. The company had a special offer during the Christmas vacation to Malaysia for Rs. 37,000, which included hotel accommodation, airport transfers and tours.

"We are hoping to put out a similar package in March for the April vacation," she said.

Some tour operators have seen a decline in traffic since the Christmas vacation, as children have gone back to school and people have less money to spend after living it up during the season.

But Classic Travels Travel Executive, Dimuthu de Silva said most of their clients were business people.

"Most of them are seasoned travellers, and they catch the Friday night flight to Bangkok, spend two days there, and return on Monday early in the morning, in time for work."

Though airfares have remained relatively stable, the cost of hotel accommodation has plummeted. "A hotel which previously went for US$ 75 is now offered for US$ 10-15, to tempt foreigners to come to Bangkok," one travel agent said.

East Asian flag carriers are offering discount travel rates to travel trade staff. Thai Airways is offering a return air ticket to Bangkok and hotel accommodation for a mere Rs. 5,000 to all cargo staff and cargo-handling agents. Cathay Pacific is offering a 90 per cent reduction in airfares to staff of travel agents and tour operators.

Mrs. Savi Peiris from Gabo Travels who has just returned from Bangkok said Sri Lankans could look forward to many bargains there. Hotel rates are at an all time low. There are fewer people in the shops, and you can shop at leisure.

A bhat, which sold for 25 for one US dollar in October, has plummeted to 55 bhats to a dollar. Sri Lankans now pay around Rs. 1.15 for a bhat, which previously cost them around Rs. 2.20. (MG)

PIMC to enter the second board

The Plantations Investment Management Company Ltd (PIMC), is seeking a listing on the second board of the Colombo Stock Exchange.

PIMC Chairman Clifford Ratwatte said the company was hoping to issue 10.6 mn shares at Rs 15 each to the public, once approval is received from the CSE and SEC.

PIMC holds the majority stakes in Udupussellawa and Hapugastenne Plantations. It is already well capitalised with an issued capital of Rs 1,060 mn. The major shareholders are Employees Trust Fund Board (47.2 per cent) Sri Lanka Insurance Corporation (28.3 per cent), National Insurance

Corporation (14.1 per cent) and the Merchant Bank of Sri Lanka (10.3 per cent).

"We are not having a public issue simply to raise money," Mr. Ratwatte said. PIMC officials say after the public issue the general public will have an opportunity to participate in the company and its shares will be traded like any other private company.

When PIMC overbid other private companies and bought the two plantations companies there were protests that it was not a private entity as its major shareholders were state owned companies.

PIMC is initially seeking a listing on the second board of the CSE as it is a new company incorporated in 1996. CSE rules require companies to have a three year track record to qualify for the main board. The second board also allows companies to issue less than 25 per cent of its equity in the initial offering. PIMC is issuing around 10 per cent of the equity.

In future PIMC is hoping to diversify the activities of the two plantation companies under its anagement.

"Now we are looking at developing the total assets," says Chief Executive D. Wijetunga. "We will mprove the yields of our core products but we are looking at other areas."

One of the first projects to get off ground will be the cultivation of vegetables for export. PIMC had also conducted preliminary negotiations with two foreign investors to set up hydro power plants.For the future it is also planning to set up a commercial farm in an estate in Yatawatte in the Matale district and grow trees for timber on bare land not suited for agriculture.

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