Financial Times

John Keells Holdings (JKH) and Associated Motorways Limited (AMW) struck a deal last week on a “Voluntary Partial Offer” where JKH will take up a 20 percent stake in AMW in a two tier strategy to develop the land at Union place and the adjoining properties of the JKHL at Vauxhall Street.

Aswin de Silva, Director Finance at AMWd told The Sunday Times FT that initially there will be a partial offer to AMW shareholders to buy a 10 percent stake or 0.8 million shares at Rs.380 each share.

“We want to leverage on the strengths of JKH and develop the property into an up market apartment complex,” he said. He said that the 10 percent offer will be pro rata to the AMW shareholding and that Associated Electricals, the major shareholder of AMW has given an undertaking to JKH that it would avail further out of its holding in the event of a shortfall.

He said that after this offer, AMW will transfer by way of private placement around 1.0 million unissued shares or 11.12 percent to JKH by way of private placement in August. The deal has been approved by the Securities and Exchange Commission and the Colombo Stock Exchange but would require shareholder consent.

Industry sources said the two sides have come together in partnership for property development and unlikely in the auto trade, which AMW is powerful in. AMW owns freehold land in extent of 217 perches in Union Place adjacent to the JKH’s Vauxhall Street property and the combined property would amount to around 4.5 acres of freehold land in prime location. “We are hoping to shift our businesses at Union place to a new location at the D.S Senanayake junction at Borella where the present Maruti showroom is located,” de Silva said.