Exit from Panasian Power mixed with emotions and profit for Jinadasa

Major shareholders who exited from Panasian Power PLC (PAP) last week did so with a profit, whilst for the leading shareholder, it was mixed with emotions too.

Young entrepreneur and investor Dilanka Jinadasa sold a 23.47% stake of 146.7 million shares along with a 2.63% stake held by Jinadasa Brothers Ltd. His and the others exit was priced at Rs. 4.30 per share. Jinadasa's average cost is estimated at Rs. 3.20.

The other two sellers were Emerald Sri Lanka Fund 1 Ltd., (125 million shares or 20%) and Senthilverl Holdings (97 million shares or 15.57%).

R I L Property PLC, under the United Motors Lanka Group, bought the 61.67% stake for Rs. 1.6 billion, a move which signals strategic diversification.

Jinadasa said the exit was with mixed emotions.

“Being part of the team that grew the company’s portfolio by adding multiple sources of energy into the generation mix, developed an African project pipeline and commissioning Sri Lanka's largest fully solar powered greenhouse farm, shaped all of us involved," he said.

He thanked the team, the board and stakeholders for what Jinadasa described as an “amazing journey.”

In a post on Facebook, Jinadasa also congratulated the new lead shareholder R I L Property and stated that he is hoping to see PAP continue to grow and make its positive impact to society in Sri Lanka and beyond.

Jinadasa bought 125 million shares at Rs. 3.20 each in May 2017 when the net asset value of PAP was Rs. 1.83. As of 31 March 2021 it had grown to Rs. 2.22. The PAP Group, by the end of the 2021 calendar year, is all set to have 30MW of installed capacity.

The PAP Group delivered strong performance in the final quarter of FY21 as the growth in their solar silo gained traction. This was coupled with a strong performance in their hydro silo, as rainfall levels returned to average levels. Alongside the 62% growth in revenue compared to the corresponding quarter in FY20, the Group saw net profit margins increase from 23% to 44% compared to the corresponding quarter in FY20. This performance was reflected in full year performance with net profit up by 63% to Rs. 248 million and net profit margin increasing from 27% to 34%.

The sale comes ahead of Jinadasa’s flagship venture Hela Clothing planning a listing on the Colombo Stock Exchange later this year.

A Bloomberg report last month stated that Hela Clothing, which supplies to Calvin Klein and Tommy Hilfiger, plans to offload a 20% stake for $ 20 million as part of capital raising for its entry into North African and expansion of its East African operations.

Hela manufactures underwear, sleepwear and children’s apparel. An entry into Egypt’s $ 1 billion apparel market will help to boost the company’s value by about 11% to $ 250 million by the end of the financial year in March, he said. Hela will set up shop in the North African nation in the first quarter of 2022 and work with existing manufacturers, leveraging the country’s fabric mills, lace suppliers and mature supply chain to reduce lead times.

“You can ship to Europe between three to seven days, and to the US within about 10 to 12 days,” Jinadasa said.

Hela is scaling up its intimates’ business, which accounts for 70% of group revenue, and added more than 2,000 employees to facilities in Ethiopia and Kenya despite the coronavirus pandemic. It plans to expand its Kenyan facility, which churns out men’s underwear, and boost bra-making at its four-year-old factory in Ethiopia.

Nearly 60% of the company’s revenue is generated outside Sri Lanka, and East Africa accounted for over $ 100 million last year, according to Jinadasa.