LOLC Group triggers Rs. 3 b takeover bid of Sierra Cables

LOLC Group is to make a Rs. 3 billion takeover bid of Sierra Cables following the crossing of 30% stake in the latter.

The move follows Browns Investments PLC, the strategic arm of LOLC Group through former’s wholly owned subsidiary Iconic trust Ltd., purchasing 6.65 million shares of Sierra Cables at Rs. 8 each in a deal worth Rs. 53.3 million.

Following the purchase Iconic Trust increased its stake in Sierra Cables to 30.42% triggering the SEC’s Takeovers and Mergers Code.

Browns Investments said it will make a mandatory offer in due course to minority shareholders. As at 30 June 2024, Iconic Trust held 156.8 million shares or 29.18% stake in Sierra Cables PLC, whose shares in issue is 537.512 million shares.

Sierra Holdings Ltd. holds 26.67% stake, whilst Almas Holdings owns 26% stake.

The public holding of Sierra Cables is 42.76% held by 20,542 shareholders as at end June 2024.

The highest share price of Sierra Cables in the June 2024 quarter was Rs. 12.30 and the lowest was Rs. 10.50 before closing at Rs. 11.20. Net asset value per share was Rs. 9.66.

The Sierra Group is involved in six major business sectors comprising; the construction and engineering sector, consumer electronics sector, cables sector, leisure sector, property development sector and the fertiliser sector.

In the 1Q of FY25, Sierra Group revenue dipped by 7% to Rs. 1.7 billion and operating by 40% to Rs. 255 million. Pre-tax profit was down by 22% to Rs. 260 million and after-tax figure was down by 15% to Rs. 186.4 million. In FY24, revenue was Rs. 8.15 billion as against Rs. 7 billion in the previous year whilst after-tax profit was Rs. 727.7 million in comparison to Rs. 703 million in FY23.