Closely following the heavily oversubscribed Maskeliya Plantations Ltd. sale, four million shares of Watawala Plantations Ltd. will be offered to the public at Rs.15/- each, divesting 20% of the government's holding of the plantation company.
The issue, which opens on the Colombo Stock Exchange (CSE) on October 6th, will remain open for subscription for 21 market days. In the event of over-subscription, the issue will close on the same day it is fully subscribed, subject to consultation and agreement with the CSE.
The Rs.10/- share at Rs.15/- provides the opportunity for individual and small investors to participate and have ownership in the plantation sector, in accordance with the objectives of privatisation.
Watawala Plantations Ltd. managed by Estate Management Services Pvt. Ltd. (EMSPL) holds 51% of its issued capital of Rs.200 million and ten rupees (golden share). Forty nine percent of EMSPL's share capital in Watawala Plantations is held collectively by TataTea Limited India (29.69), Coffee Lands Limited India (3.12), and Sabras Investments and Trading Company Limited India (16.19), according to the offer for sale document (prospectus) released for the sale.
With the conclusion of this sale, the ownership of Watawala Plantations Ltd. will be; EMSPL 51%, public 20%, GOSL 19%, and employees of Watawala Plantations Ltd. 10%.
The golden share originally issued to the Treasury Secretary will subsequently be transferred by him to a company owned by the government set up to hold golden shares of the Regional Plantation companies.
Ten per cent of the shares will be gifted to employees according to their respective periods of service following this public issue.
The company comprises 15 tea estates, 3 tea cum rubber estates, 1 rubber estate and an oil palm estate covering a total area of 12,442 hectares. Of these estates, five are in the Udugama sub-district, nine medium to high grown estates in the Watawala/Hatton sub-district and 6 high grown estates in the Talawakelle sub-district.
The company made a net profit of Rs. 85 million for the year ended December 96 on a turnover of Rs. 894 million. In 1995, the company made a marginal loss on turnover of Rs. 783 million.
Unaudited profit and loss accounts said the company had made a profit of Rs.87 million for the period ended 30.6. 97.
The accounts reviewed by Chartered Accountants Wijeratne and Company did not specify the period relating to the profit and loss account. However PERC sources confirmed that it was for the first six months of the year.
Rs. 732 million of turnover came from tea in 1996, Rs. 99 million from rubber and only Rs. 62 million from oil palm and others.
The estates which are on a 53 year lease involves a basic annual lease rental of Rs. 20,320,000 million multiplied by the GDP (gross domestic product deflator) of the preceding year and payable in quarterly instalments.
The company's directors are: Chairman, Mr. Govindasamy Sathasivam (also MD Lanka Medical Imports Ltd. and director, Gloves International Pvt. Ltd., Director, Mr. Vish Govindasamy (also MD Technology Consulting Services Pvt. Ltd.) Director, Mr. Rayaroth Kuttambally Krishna Kumar (also vice chairman of Tata Tea Ltd. India and Director, Mr. Shehasis Kabiraj (also director finance, Tata Tea India Ltd.)
They came, they talked, they flew away. Only time will tell whether, in two days, the first South Asian tourism ministers meeting to be held in 28 years accomplished much.
Many speeches were made while the seven SAARC tourism ministers convened in Colombo last week to discuss the industry's regional prospects. But when it was over, they eventually returned to their capitals, taking with them a non-binding declaration composed mainly of equally solemn agreements on future joint action.
"This is a non-binding document, because SAARC is a voluntary organisation," WPS Jayawardene, Secretary at the Ministry of Tourism and Civil Aviation, told Sunday Times Business on Thursday.
"But once the Ministers [of SAARC states] agree [to this joint declaration], naturally their governments will adopt their recommendations, otherwise there is no point for them to attend such a meeting."
On Sept. 23, when the meeting opened, a lot was said about how South Asia, with a potential market of over a billion people, hardly figures on the map of world tourism, said to be among the most dynamic and lucrative of trades. According to the World Trade Organisation, South Asia, in that regard, is dead last, lagging far behind Europe, the Americas, and Asia/Pacific in numbers of tourist arrivals by region. [See Graphic I]
"We have in our region an incomparable melange of natural resources, climatic variations and life forms enriched further by the many civilisations which left their imprint over the course of millenniums of history.... and yet our region today accounts for but a small fragment of global tourism," Naeem U Hasan, SAARC's Secretary General, said on Tuesday.
"Recent estimates reveal that the SAARC region is home to only 0.8 percent of international tourist arrivals and accrues a mere one percent of global tourism receipts. Similarly, and of more concern, is the fact that intra-regional tourism in South Asia still remains insignificant."
Doing away with red tape and other bureaucratic obstacles to free trade was generally seen as crucial to the survival of tourism in the region.
"Several important issues have been detailed for discussion at this meeting like the simplification of visa procedures, convertibility of [SAARC] currencies, establishment of direct air links [between SAARC capitals], etc." said Dharmasiri Senanayake, Minister of Tourism and Civil Aviation.
And when the SAARC ministers wrapped up their talks on Wednesday night, they came out with their Draft Colombo Resolution. In it, agreements for future support or action on matters such as visas, direct air links, and currency convertibility appeared to outweigh joint decisions taken "with immediate effect."
For one, the ministers "Agreed that all Member States should strive to simplify visa-related procedures and harmonise documentation for nationals of SAARC Countries."
To this end, the SAARC Secretariat in Katmandu would now deliberate on who else might be entitled to extensions of the Visa Exemption Scheme covering regional dignitaries, Secretary Jayawardene said.
Under the resolution, "monitoring cells" would be set up in SAARC tourism ministries "to monitor the implementation of decisions of the Technical Committee on Tourism."
"This will be under the supervision of the political authority — that means the minister," Mr Jayawardene said.
One provision to take immediate effect was the implementation of the SAARC Scheme for Promotion of Organised Tourism. SPOT, according to the secretary, will enable groups of five travellers or more, to fly inside the region at discounted rates of up to 20 percent on SAARC airlines.
"Already we are implementing this to encourage tour groups," he said.
Another concluded decision was "to meet periodically but no less than once in two years to further promote regional cooperation in tourism."
As far as Sri Lanka was concerned, the local outlook for tourism was now looking up after last year's drop of 25 percent in tourist arrivals, following the Jan 1996 Central Bank bombing.
According to the spokesman for Tourism and Civil Aviation, arrivals to the island, given current trends, are expected to total around 400,000 in 1997.
"Total tourist arrivals for the month of July '97 registered an increase of 21.6 per cent to 30,867 from 25,380 in July 1996," the Ceylon Tourist Board recently reported. "The cumulative arrivals for the first seven months of 1997 were 205,101 with an increase of 20.6 per cent over the same period of last year.
In order to add to Sri Lanka's average annual return of Rs. 11mn in tourism earnings, the government has launched a worldwide media blitz, and is working with private enterprise to improve the island's image abroad, Mr. Jayawardene said.
"We are spending US$ 2.5bn on an image building campaign," he said.
This theme was touched upon by President Chandrika Bandaranaike Kumaratunga in her keynote speech to the SAARC ministers on Tuesday.
"We must admit that we have not done enough, individually and collectively..." she said. "I believe that one of the major reasons for this may lie in the fact that we have not sufficiently promoted out tourist capacities in the world."
Ceylon Tourist Board Chairman H. M. S. Samaranayake said Sitha Eliya would be developed as a sacred area to attract tourists.
Once equipped with the necessary infrastructure, the area would target Indian tourists in particular, he said. Mr. Samaranayake was speaking after the inauguration of the 46th annual convention of the Trave Agents Association of India.
India and Sri Lanka are discussing the possibility of relaxing visa requirements for travel between the two countries, President of the Travel Agents Association of Sri Lanka Udaya Nanayakkara said.
Mr. Nanayakkara is also the chairman of the committee that is currently hosting the TAAI convetion at the BMICH.
Officials said no visas were needed to travel between India and Nepal and the questions are being raised why a similar arrangement could not be worked out between India and Sri Lanka as well.
In 1996 88,000 Sri Lankans had travelled to India and 42,000 Indians visited Sri Lanka.
More than 1100 delegates from India and neighboring countries and around 100 delegates from Sri Lanka are participating in the TAAI convention this year.
The convention had last been held here in 1956.
TAAI President T. E. J. Sahni, Vice President Ms. Neeraj Ghei were also at the news conference.
The theme of the TAAI convention this year is Travel and Tourism - Key to Regional Prosperity".
The program of the convention includes five business sessions on themes of Regional Tourism - the need to move forward, Travel Agents Relations With Airlines - what next?, Inbound Tourism - infrastructure for the 21st century, Outbound Tourism - infinite possibilities and Partners in Service.
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