Lanka Milk Foods effects Rs. 5 b worth shareholding restructuring of 4 subsidiaries

Lanka Milks Food (CWE) Plc Chairman Harry Jayawardena

• Consolidates dairy business value chain under one company to improve, develop and increase production of fresh milk and milk based products

Lanka Milk Foods (CWE) Plc has concluded a Rs. 5 billion worth shareholding restructuring involving four subsidiaries. 

They are Ambewela Products Ltd., United Dairies Lanka Ltd., Ambewela Livestock Company Ltd., and Pattipola Livestock Company Ltd.

LMF has transferred the entirety of shares it owns in the four subsidiaries to Lanka Dairies Ltd., (LDL) a fully owned subsidiary. This is in pursuance of a proposal to restructure the group of companies under LMF for the purpose of streamlining the ownership and operational structure of the companies within the Group. Furthermore, the consolidation of the dairy business value chain under one company would improve, develop and increase the production of fresh milk and milk based products.

The related party transaction between LMF and LDL amounted to Rs. 5 billion and the consideration will be settled by LDL through the issuance of new shares in LDL to LMF at Rs. 10 per share. The ultimate ownership of the four subsidiaries will continue to be with LMF.

In the first six months of FY23, LMF Group saw its Group revenue increase by Rs.1.8 billion to Rs. 8.7 billion and operating profit by Rs. 294 million to Rs. 1.2 billion. Post tax profit crossed the Rs. 1.1 billion mark as against Rs. 920 million a year ago.

Of the turnover, liquid milk and others were worth Rs. 5.66 billion. Its profit from operations was Rs. 215 million, lower in comparison to Rs. 727 million by powdered milk, turnover from which was Rs. 2.95 billion in 1H of FY23.