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| Sunday, 3 February 2002 |
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Touchwood IPO opens on Feb. 6 by INDUNIL THENUWARA The first Initial Public Offering (IPO) to appear in the Colombo Stock Exchange since 2000 will be launched by Touchwood Investments Ltd. on February 6. This will also be the first IPO to take place since the new listing rules were introduced by the Stock Exchange (CSE). The local company, approved by the Board of Investment to farm 2000 acres of Mahogany, will offer 800,000 ordinary shares at a par value of Rs. 10. Thereafter, 2.23 million ordinary shares of Touchwood are expected to be listed in the CSE. "The issue will close on February 25. However, if it is oversubscribed before this date, it will close on the date on which it was oversubscribed," Saffina Fairoos, Manager - Capital Market of Merchant Bank of Sri Lanka, which is the manager to the issue, said. The company will be listed on the Second Board of the CSE. The public share issue will account for 36 per cent of the company and the proceeds will be utilised to plant more Mahogany trees, she said. Chairman, Touchwood Investments, Roscoe A. Maloney said that the novel project had been under research for the last five years with over 300 woodlots (60 acres) already being sold. With an investment of Rs. 10,000, a customer can purchase a tree and after 17 1/2 years, when the tree has reached maturity, it can be sold back to the company for Rs. 250,000. Touchwood supplies the land, plants the trees, manages and safeguards the plots till maturity. "This is a sound investment policy as well as being a step towards stopping the destruction of rain forests. We decided on Mahogany for this project as they are ideal for the Sri Lankan climate, suitable to be grown in different geographical locations, have relatively short-term harvest cycles of 17 1/2 years, are resistant to even hurricanes and fires and have high value and demand even in other countries," he said. If an investor's tree is destroyed due to some reason, however remote this possibility maybe, the company has a buffer stock from which the damaged tree will be replaced, he added. Among Touchwood Investments' future plans are the development of a Mahogany Tree Preference Share, putting up a saw mill and factory, export of Mahogany timber and products, establishment of carbon credit trading and development of Mahogany woodlots outside Sri Lanka. |
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