Citrus opts for corporate restructuring
The Citrus Group of Companies announced an overall strategic
restructuring plan of its group last week.
The proposed strategic restructuring subject to relevant regulatory
approvals, shareholder approvals and conditions, entails Hikkaduwa Beach
Resort PLC (CITH) making a voluntary offer to shareholders of Waskaduwa
Beach Resort PLC (CITW) and CITH amalgamating with Kalpitiya Beach
Resort PLC (CITK) and Passikudah Beach Resort Ltd (PBR) at a premium
price (to market) to shareholders, a company press release said.
The proposed strategic restructuring under the guidance and advice of
NDB Investment Bank Limited, will create three strategic verticals (viz.
owning and operating resorts, third party resorts under management and
other leisure related services).
The board was of the view that this proposed strategic initiative
will achieve higher levels of fiscal and management efficiency within
the verticals by optimizing and unlocking the collective strengths and
synergies within the Group.
This would in turn lead to economies of scale, better risk
management, cost effective administration and prudent tax management,
which would ultimately be accrued to the benefit of all shareholders.
It is believed that the consolidated entity is in a better position
to pursue more growth opportunities and the strengthened financial
position enhancing fund raising capabilities both via equity and debt
through strategic partners and financial institutions.
The board was also of the view that the proposed restructuring
exercise would enhance the shareholder value at all levels in the future
compared to the constraints of stand-alone resort properties as at
present.
The consolidation will also mitigate the risk associated with a
single leisure sector property and enable them to benefit from
operational efficiencies of a portfolio of resort properties and partner
an entity with better growth prospects.
The strategic restructuring at this juncture confirms Citrus Groups
confidence and commitment in the future prospects of the industry and
its intent to be a force in the tourism sector, the press release said.
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