|
|
|
|
| Sunday, 19 June 2005 |
 |
|
 |
Business |
 |
|
News Business Features
Editorial
|
Kotmale Holdings goes for expansion Kotmale Holdings Ltd has initiated a Private Placement to issue approximately 12,560,000 ordinary shares, which will be offered at a par value of Rs. 10 per share. The issue opened on June 14 after the Extraordinary General Meeting on June 13 which also saw the name change of the company from Lambretta (Ceylon) Ltd to Kotmale Holdings Ltd. Following Sri Lanka's first-ever reverse takeover by its parent company Lambretta (Ceylon) Ltd, Kotmale Holdings Ltd has become one of the largest dairy processors nationally. Kotmale holdings Ltd has a track record of steady growth. The last four years saw the company recording an accumulated growth rate of 200% in turnover. For the year ended December 31, 2004, its consolidated profit after tax was approximately Rs 20 million. "Based on the company's current growth rates and the forthcoming infusion of new capital, we would anticipate Kotmale Holdings Ltd to record a profit in the region of Rs. 40 million for the year 2005. That in turn would increase the attractiveness of the share," said Ramesh Schaffter, Chief Executive of Kotmale Holdings Ltd. This share issue is a part of Kotmale Holdings Ltd's expansion strategy. The net proceeds from the offering will be used to strengthen the company's balance sheet, broadbase ownership of the company and finance expansion. An estimated Rs. 30 million will be invested in strategic corporate enhancement such as upgrading the production facilities at Kotmale and Colombo. A further Rs. 60 million will be used on debt repayment and to develop the company's distribution network to an islandwide reach. The balance will be used to finance working capital requirements. With this offer, Kotmale Holdings Ltd intends to consolidate its presence in the Sri Lankan market, where the company sees substantial potential for profitable growth, he said. The share issue would also allow the company's current employees to participate by becoming shareholders of the company. A 10% of the shares will be available to employees at a par value of Rs. 10 per share thereby enabling them to purchase shares without any restrictions. Established in 1979, Kotmale Holdings Ltd has evolved from a small proprietorship into one of Sri Lanka's largest manufacturers of fresh cream, pasteurised flavoured milk and cheese and also pioneered in the introduction of the 45-day long-life fresh milk using the Tetra Fino packaging system. Kotmale Holdings Ltd also sees great potential in the ice cream market in which it already enjoys a 5% market share. Schaffter said that the ice cream market has grown substantially in the
past two years and is now in the region of two million litres per month. We
see that as a major growth area for Kotmale Holdings Ltd, therefore we will
be utilising funds generated from the share issue to invest in distribution
channels, infrastructure and advertising thereby positioning ourselves as
one of the leading players in Sri Lanka's ice cream market. |
|
|||||||||
|
| News
| Business |
Features |
Editorial | Security | Produced by Lake House |
