Citrus announces strategic corporate restructure
View(s):The Citrus Group of Companies owning the new Sri Lankan leisure brand ‘Citrus’ announced in a statement this week of an overall strategic restructuring plan of its group subject to relevant regulatory approvals, shareholder approvals and conditions. This entails Hikkaduwa Beach Resort PLC (CITH) making a voluntary offer to shareholders of Waskaduwa Beach Resort PLC (CITW) and CITH amalgamating with Kalpitiya Beach Resort PLC (CITK) and Passikudah Beach Resort Ltd (PBR) at a premium price (to market) to shareholders. “The proposed strategic restructuring under the guidance and advice of NDB Investment Bank Ltd, will create three unique strategic verticals (viz. owning and operating resorts, third party resorts under management and other leisure related services),” the statement said.
The Citrus board was of the view that this proposed strategic initiative will achieve higher levels of fiscal and management efficiency within the verticals by optimising and unlocking the collective strengths and synergies within the Group, the statement added. “This would in turn lead to economies of scale, better risk management, cost effective administration and prudent tax management, which would ultimately be accrued to the benefit of all shareholders. In addition to operational efficiencies, it is believed that the consolidated entity is in a better position to pursue more growth opportunities and the strengthened financial position enhancing fund raising capabilities both via equity and debt through strategic partners and financial institutions.”
The board was also of the view that the proposed restructuring exercise would enhance the shareholder value at all levels in the future compared to the constraints of stand-alone resort properties as at present. The consolidation will also mitigate the risk associated with a single leisure sector property and enable them to benefit from operational efficiencies of a portfolio of resort properties and partner an entity with better growth prospects. The strategic restructuring at this juncture confirms Citrus Groups confidence and commitment in the future prospects of the industry and its intent to be a force in the tourism sector, the Citrus statement said.