EGM for Agalawatte: Damro says around 70% dues already paid
Furniture manufacturer Damro Group has settled more than 70 per cent of the dues which their latest acquisition – Agalawatte Plantation PLC – owed, officials said.
In a statement to the Colombo Stock Exchange (CSE), Damro announced an EGM to appraise shareholders on a restructuring plan for the plantation that was originally put forward by Agalawatte’s previous owners, Browns PLC who had a contentious relationship with the plantation’s original owners – the Nonis family (who were the founders).
Damro officials said that when they acquired Agalawatte, they had agreed to the restructuring that Browns had proposed. The fresh audit that was directed by Sri Lanka Accounting and Auditing Standards (SLAAMB) last year to Agalawatte Plantations PLC showed that the net assets of the company and its group as at 31st December 2014 had become negative by Rs. 215.87 million and Rs. 130.53 million, respectively.
The quarterly financial statements of the company prepared and published by Browns for the year ended 31st December 2015 show losses of Rs. 450 million and Rs. 405 million for the company and the group, respectively. Damro says that this will further increase with the re-audited negative net assets position of the company as at 31st December 2014 together with un-accounted liabilities detected following the re-audit. “The draft accounts for the financial year ended 31st December 2016 are expected to report a further loss of approximately Rs. 550 million for the company before adjusting for fair valuation on consumable biological assets, the impairment of un-economical assets and accrual of unaccounted surcharges on unpaid statutory dues such as Gratuity, EPF and ETF joint contributions,” the statement, that Damro released to the CSE (that was originally prepared by Browns) calling for an EGM next month, says.
“Damro has already paid Rs. 207 million as the lease rental to the Treasury,” a Damro source told the Business Times adding that all gratuity payments will be completed by month-end. He added that all EPF and ETF payments without court cases were also settled. He said they’re negotiating with some banks to settle all dues.
The source said that the proposal in the CSE statement that Browns had included requesting the Ministry of Plantations Industries (PMMD) to recommend to the Treasury to grant a 5-year period to settle the outstanding Government lease rentals while providing a 50 per cent moratorium on the current lease rentals for period of 5 years until all past bank liabilities are settled won’t be effective now because the lease rental has been paid after this statement was published. Similarly, they won’t approach the Labour Department as was suggested by Browns as they’re now paying gratuity. Damro has settled what Agalawatte owned to all financial firms, the source said adding that most liabilities owing to banks were also settled.
“The idea is to settle all liabilities and carry on with the business,” he reiterated.
Still Agalawatte’s board is run by Browns but when the mandatory offer is completed Damro will get into the board, he said.