Ceylon Oxygen changes hands, new owners

A majority 70.8 percent controlling stake of Ceylon Oxygen, worth 4.78 million shares, was purchased from Yara International by Europium Ltd through its local subsidiary Specialist Gases, effectively changing ownership in one of the key stockmarket deals last month.

Bartleet Mallory Stockbrokers in its monthly report for September said that this was transacted in two crossings amounting to 3.63 million shares at Rs.242 and 1.14 million shares at Rs.241.75. “A mandatory offer has now been made by Specialist Gases (Pvt) Ltd for the remaining shares in Ceylon Oxygen, at a price of Rs.242 per share and the closing date is 17th October,” the report said. It said that in the event of Specialist Gases acquiring a minimum of 75 percent of the issued capital of the company, it intends to submit an application to the Stock Exchange to de-list the shares.

Europium Ltd is a company incorporated in Mauritius with a 98.85 percent stake controlled by Actis South Asia Fund 2 LP. Europium Ltd in turn controls 100 percent of Specialist Gases which was incorporated in Sri Lanka solely for the purpose of acquiring Ceylon Oxygen.

The report said that the economy had yet again shown it’s resilience for the third quarter depicting a better than expected growth of eight percent with three sectors viz agriculture, industries and services rapidly progressing posting healthy growth levels, the economy is set to post a GDP growth of eight percent for 2006, albeit the country faced with trying conditions throughout the year.

“However, increasing in worries seems to be the present crisis in the North & East, which has invariably forced the government to increase it’s defense budget to 137 billion rupees from a earlier budgeted 96 billion rupees,” the report said. It said that oil prices which had a spiraling effect on the global economy recently with a barrel of oil hitting a year to date high of US $ 78, also had a negative impact on the economy with the oil import bill rising significantly from a earlier budgeted US $ 1.60 billion to 2.2 billion this year. However, with oil prices dropping considerably in September it is likely the country would opt for hedging agreements to off set any future increases in price fluctuations.

Inflation too saw a further hike with the Colombo consumer price index reaching a staggering 15.4 percent in September, marginally up from 15.3 percent in August. Overall the month was very cheerful, with the market regaining lost momentum. The ASPI (All Share Price Index) moved up by a staggering 183.47 points while the MPI moved a whopping 208.18 points. During the 20 trading day period the average daily turnover has been Rs. 365.37 million, while the foreigners have been net buyers, with an inflow of Rs.80.48 million.