Cable Solutions IPO presents attractive entry point for investors seeking growth

Sri Lanka’s only specialised integrated cable manufacturer and subsidiary of the ACL Group, Cable Solutions Ltd., (CSLK), has announced its plans for its Initial Public Offering (IPO) and subsequent listing on the Diri Savi Board of the Colombo Stock Exchange.

 The IPO will comprise of a total of 80,786,600 ordinary voting shares of the company offered to the public, through a combination of an offer for subscription of 14,666,600 new ordinary voting shares and an offer for sale of 66,120,000 existing ordinary voting shares. The sale of existing shares of the company, by few non-majority shareholders, will be subject to the offer for subscription being fully subscribed. 

The offer price for CSLK shares is set at Rs. 7.50 per share. The company aims to raise Rs. 109,999,500 from the public through a subscription offer for 14,666,600 shares. The primary purpose of this fundraising effort is to allocate 81.8% of the proceeds towards capital expenditures for new machinery and production line upgrades, aimed at enhancing production efficiency. 18.2% of the funds will be utilizsed to enhance the working capital position. Through the offer for sale, a few existing shareholders plan to sell a combined total of 66,120,000 ordinary voting shares in CSLK. Among these shareholders are Rosewood Ltd., Associated Electrical Corporation Ltd., and Perera & Sons (Bakers) Ltd. However Rosewood and Perera & Sons (Bakers) will retain a significant number of shares despite the partial offer for sale. The IPO will open on 23 July 2024 and is managed by Asia Securities Advisors Ltd.

Ahead of its upcoming IPO, the Company will host a Virtual Investor Forum on 9 July.  This event is expected to provide investors, analysts, partners, media, and the public with a comprehensive understanding of the Company and its future prospects. Attendees will have the opportunity to engage directly with the Company’s leadership team to seek clarifications and understand future growth avenues for the Company. 

Cable Solutions Ltd. was established in 2008 as a cable manufacturing company in collaboration with Swedish and Indian partners at Flinth Industrial Park, Kadawatha, and currently operates production centres in Sri Lanka and India. A key differentiator for CSLK is its strong R&&D and engineering capabilities, which enables it to customise cables to meet specific client requirements. In December 2019, a consortium of investors structured by Tempest PE Partners and led by ACL Cables PLC acquired a 75% stake in CSLK. ACL as the lead member of the consortium currently holds 52.64% stake in CSLK. ACL Managing Director Mr. Suren Madanayake, Managing Director of ACL, chairs the Board of CSLK together with a diverse and experienced Board of Directors with a combination of ACL’’s leadership team and other Independent Non-Executive Directors.  

CSLK CEO/Managing Director Pawan Tejwani said: “We are honoured to invite the public to join us on this journey as we strive to become one of the top 10 cable manufacturers for the electronics industry in Asia and Europe by 2028. In FY 2023, our revenues exceeded LKRs. 3.3 billion. CSLK currently exports to 13 countries, with export revenue accounting for 94% of our total revenue. Our export markets include the USA, UK, Spain, Italy, Germany, Sweden, Switzerland, Russia, India, Australia, and New Zealand.

 We have diversified our presence across multiple industries including, load cells, automotive, electronic vehicle, instrumentation cables and renewable energy. Our strategic direction is aligned with booming global industries and sectors, positioning us perfectly in a significant growth trajectory. As we embark on this journey, our aim is to create exceptional value for our stakeholders and build mutually rewarding partnerships.””

Exclusive financial advisors and managers to the issue Asia Securities Chairman Dumith Fernando   said: “As managers and financial advisors to CSLK’’s upcoming IPO, we are excited to highlight the company’s exceptional strengths and competitive edge in the global marketplace. As the sole specialised integrated cable manufacturer in the country, CSLK’’s value proposition to investors is unique. Its unrivalled position, combined with its robust export-oriented business model, give CSLK a distinctive value proposition compared to its peers. The upcoming IPO presents a compelling opportunity for investors to participate in CSLK’’s global growth narrative and gain exposure to a successful and profitable exporter that caters to high-value and growing industries through its customised cable manufacturing solutions.””

CSLK has obtained multiple international quality certifications, demonstrating their commitment to environmental and sustainability standards. These certifications include ISO 9001:2015 for quality management systems, ISO 14001:2015 for environmental management systems, and TUV Rheinland certification for manufacturing solar cables according to BS EN 50618 standards. CSLK’’s dedication to sustainability is further demonstrated by its achievement of complete carbon neutrality.

For more information about Cable Solutions Ltd. and its IPO, please refer to the company's prospectus, which is now available to the public on the website of the Colombo Stock Exchange (www.cse.lk).