Hayleys said on Friday that it ‘cashed out’ of Dimo as it needed the money, and is considering going to the public for capital. “Dimo has been a good investment for us and an investment in which we think that at this point of time, would do well to cash out of," Hayleys Chairman N.G. Wickremeratne told The Sunday Times FT in an exclusive interview.
Discussing the recent divestment in their 28 percent stake in Dimo, Mr. Wickremeratne said. "We need the money and with interest rates going up, borrowings are high and these are things that have been earmarked for rationalisation. We have considered the process for two to three years and brought it to a head." He explained that the manufacturing sector is not able to generate the level of profits it should, due to a deadly combination of inflation, exchange rates and high interest rates.
"We need an infusion of equity capital," the Hayleys chief said in a detailed interview, adding that going public is seriously under consideration. "We are on the cusp of a difficult time," he said. "Our businesses are brilliant businesses but if you have a set of externalities you have to deal with which stretch your business, sometimes you don't lower your drawbridge at the worst time. You do it at a time which is good." He mentioned that in the past, Hayleys has had rights issues, bonus issues and dividends to investors.
"At a certain time, we will draw equity capital but in what form or shape that will occur will be designed so that the nature of Hayleys will not change." He said Hayleys will move out of some non core businesses that are not doing well. The company's core areas are manufacturing, the agricultural sector, plantations, transportation and agri products but he said that even in these sectors, there could be within the segments some areas that are not performing well which do not fit into the business which Hayleys may exit from. "It's to make the whole business more efficient and more sharply focused," he said.