Monday, 13 October 2014 00:23
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Largest shareholder Parkson Retail Asia Ltd., has decided to exit from Odel Plc claiming returns have been below expectations.
However the divestiture of 47.46% stake on fashion retail giant Odel acquired in 2012 would be at a profit of Singapore Dollars (S$) 601,000 (or Rs. 60 million)
The exit would be via the acceptance of the mandatory offer made by Softlogic Holdings Group on Odel at Rs. 22 with a total deal price of Rs. 2.84 billion. At the time of its purchase Softlogic said it was willing to invest further in Odel in the event Parkson exits or work together if the foreign shareholder remains. Softlogic paid Rs. 2.7 billion for the 45% stake.
“As the returns from the investment in Odel have not met the Company’s expectations the Company has decided to monetise its investment in Sri Lanka and focus on its core markets,” Parkson said in a statement. “However the Company’s expansion strategy in the South Asian region remains unchanged and the Group will continue to look for other opportunities in the region,” it added.
The disposal will result in a cash inflow of around S$ 27.6 million to the Parkson Group and net proceeds will be used for the company’s general working capital purpose. The excess of cash consideration over book value of Odel was around S$ 560,290.
