Al-Futtaim acquires majority shares of AMW
Investment climate conducive:
By Surekha GALAGODA
[email protected]
Al-Futtaim, the Dubai headquartered automotive, retail, electronics
and financial services conglomerate acquired 71%, the majority shares of
Associated Motorways (AMW) plc early last week.
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Ajita de Zoysa |
Initially Al-Futtaim paid Rs 5.1 bln and acquired 51% of AMW held by
Associated Electrical Corporation plc (AEC), an investment holding
company.
This stake was purchased by the group's wholly owned subsidiary Al-Futtaim
Engineering (AFE) which also purchased a further 20% of AMW shares held
by the investment holding company John Keells.
Chairman, AMW Ajita de Zoysa said that it has been a family company
for 50 years and the next phase of development is tremendous but we
needed a huge capital infusion.
I don't like to get into too much debt as in my opinion it is the
first step to the downfall of a company. I was introduced to Al-Futtaim
by Alex Lovell and after carrying out a comprehensive due diligence as
an initial step they decided to take over the majority control of the
company.
It is an extremely friendly takeover, the management will not change
and my brother will succeed me as the Chairman of the company, said de
Zoysa.
This move will support the company's investment in a automotive
assembly project as well as the real estate development project and also
transform AMW into a multi-national corporation.
On the real estate front the MoU which we entered into with John
Keells and Finlays will hold.
De Zoysa said that Al-Futtaim will bring in new management expertise
and create employment opportunities.
All employees of AMW have now become part of a multi-national group
with significant prospects for themselves with possibilities of
assignments in any of the nine countries that Al- Futtaim group operates
to advance their skills and economic prosperity.
He said that the sale of AMW shares will result in a significant
increase in the cash flow of Associated ElectricalCorporation (AEC) and
several options for the utilisation of these funds will be considered.
De Zoysa said that this is the second large foreign investment
introduced by Lovell, the first being the substantial investment into
Union Bank.
These two largest investments to a great extent will dismiss the
common belief that the investment climate is not conducive for foreign
investment and I believe that this augurs well for Sri Lanka to attract
more Foreign Direct Investment.
Senior General Manager, Business, Al-Futtaim Engineering plc Bob
Farrow said that they will open branches in the SAARC region with AMW as
the headquarters.
He said that this acquisition is in line with the automotive
development division's strategy, the group's global strategy and the
direction in which CEO Omar Al-Futtaim wants to take the business.
Farrow said.
we see enormous potential to grow AMW's core business and to expand
to new sectors and markets.
There is strength and depth in the business and we see good reasons
to be confident about the future of Sri Lanka's economy and this
acquisition gives us a foothold we fully intend to build on, said
Farrow.
He said that the AMW brand portfolio is a good fit with Al-Futtaim
particularly its high volume market leading distributorships such as
Maruti, Nissan, Renault, Suzuki, Yamaha, Piaggio, Goodyear tyres,
Castrol and BP.
In the UAE we have the leading automotive brands such as Toyota,
Lexus, Honda, Chrysler, Dodge, Jeep and Volvo.
This acquisition follows the recent acquisition of Singapore's
prestigious retailer, the Robinson group by Al-Futtaim.
Established in the 1930's as a trading enterprise it now has
interests in automotive, electronics, engineering, technology, retail,
financial services and real estate. |
