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| Sunday, 26 October 2003 |
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| News Business Features Editorial
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James Finlay plantations change hands James Finlay and Co (Colombo) Ltd (JFC) announced last Thursday that its wholly-owned subsidiary James Finlay Plantation Holdings Ltd has sold its majority shareholdings of 56.8 per cent and 57.7 per cent respectively in Udapussellawa Plantations Ltd and Hapugastenne Plantations Ltd to James Finlay Holdings (Lanka) Ltd, a wholly-owned subsidiary of James Finlay Ltd (JFL). Glasgow is also a majority shareholder of JFC. The sale was concluded for a total net consideration of Rs 510 million. The transaction prices were independently verified by the Board of Directors. The company's acquisition of the plantations was made at a time when the tea prices had peaked and plantation companies were reporting huge profits. However, immediately after the company acquired the plantations, the Russian Rouble crisis resulted in tea prices falling drastically. Not withstanding this set-back, the plantation companies of the Group continued to invest in fields and factories to increase production and yields and to improve the quality of tea. It is against this backdrop that the Directors considered it prudent to de-link the plantation businesses from the rest of the Group. JFL has been involved in plantation activities for many years in Kenya, Sri Lanka, Bangladesh and Uganda and is ideally suited to take over the ownership and management of the two Lankan companies. Chairman, R.L. Juriansz expressed confidence that the proposed course of action provides the foundation and strategic direction to grow the continuing businesses of the company, while at the same time putting the plantation activities under the care and ownership of a financially stronger parent, capable of and committed to taking a longer term perspective, with regard to their viability. He further stated that it is his belief that, both groups of businesses will benefit by these proposals, achieving a "win-win" position for the major stakeholders, including the employees and the shareholders of the respective businesses. (PJ) |
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