Sunshine Holdings eyes plantations and blending in SA

Sunshine Holdings is exploring opportunities to invest in the South Asian region in the areas of plantations and blending, said Group managing director Vish Govindasamy.

He said that the diversified conglomerate Sunshine Holdings PLC issued 3,333,333 new ordinary shares to Aureos South Asia Fund LLC as a private placement at Rs 153 per share. The funds raised through issuing of new shares amount to Rs 510 mln.

Govindasamy said that the funds raised will be used to settle a loan of Rs 75,000,000 obtained to purchase 10% equity share capital of TATA communications Lanka Ltd, purchase new machinery for Sunshine Packaging amounting to Rs 150,000,000 and settle short term loans of Sunshine Holdings and Swiss Biogenics Limited.

Govindasamy said that they are proud to have Aureos South Asia Fund LLC as a strategic partner investing in a 25% stake through a private placement. He said that this is a win-win situation for the shareholders as the bottomline and profits will increase due to the infusion of capital. ASAsiaF was set up by Aureos Capital Limited, one of the leading private equity fund management companies specialising in investing in small to mid-cap businesses in emerging markets.

Founded in 1967, the Sunshine Group is an emerging conglomerate in Sri Lanka. The Sunshine Group has businesses in plantations, branded teas, distribution of pharmaceuticals and related products and metal packaging solutions for food and beverages. In the financial year ended March 2008, the group revenue was US$68 million while the profits attributable to shareholders were US$ 1.9. Sunshine Group is listed on the Colombo Stock Exchange.

Aureos Regional Managing Partner in Sri Lanka Nissanka Weerasekera said: “We were impressed by the company’s long and successful presence in Sri Lanka and its solid financial performance. The management team is very strong and has put together strategic alliances that have placed Sunshine in a very good position from which to pursue further growth. We look forward to working together to help Sunshine expand its operations and firmly establish the company as a regional powerhouse.”

Weerasekera said that Aureos specialises in managing funds of emerging markets. They manage funds from Latin America to China. Our company has several regional funds as opposed to a large central fund. He said that they have funds to the value of US$ 700 mln and plans are under way to increase it to US$ one bln by the end of this year.

In addition to the investment in the Sunshine Group, Aureos has also acquired a 5% stake in Watawala Plantations PLC (Watawala) - a Sunshine Group company for US$0.9 million. Watawala is a leading Sri Lankan plantation company and is also listed in the Colombo Stock Exchange.

Watawala is majority owned and managed by a joint venture company owned by the Sunshine Group and Tata Group of India.

Watawala is a leading producer of tea, rubber and palm oil. It has diversified its core plantation business focus to include retailing and exporting of branded teas and cultivation of fruits for the export market. For the year ended March 31, 2007, Watwala’s recorded a net profit of US$ 3.8 million.

Aureos Capital Ltd is a private equity fund management company, domiciled in Mauritius, which specialises in providing expansion and buy-out capital to unlisted mid-cap businesses across Asia, Africa and Latin America. It was set up in July 2001 to assume management of a range of funds originally sponsored by CDC Group PLC and to raise and manage a new generation of private equity funds under the Aureos brand.

Today, the shareholders in Aureos comprise employees, along with CDC Group PLC, Norfund and FMO which are the British, Norwegian and Dutch development finance institutions.

Since 2001, Aureos has increased its funds under management to over US$710 million and extended its geographical footprint to over 50 emerging markets covering Asia, Africa and Latin America, by establishing 14 regional private equity funds.

Investors in Aureos funds include institutional investors, bilateral and multilateral development finance institutions, fund of funds, family offices and foundations and high net worth individuals.

Aureos is in the process of raising funds for the US$100 million Aureos Central Asia Fund, the US$300 million Aureos Latin America Fund and the US$400 million Aureos Africa Fund.

SG