Singer Industries, Regnis to merge with parent Singer Sri Lanka

Singer (Sri Lanka) Plc yesterday announced plans to amalgamate subsidiaries Singer Industries (Ceylon) Plc and Regnis (Lanka) Plc with the parent subject to regulatory and shareholder approval.

The proposed effective date of the amalgamation will be 31 January 2024.

Singer (Sri Lanka) Plc currently holds 58.29% stake in Regnis (Lanka) Plc and 87.72% in Singer Industries. Singer said the proposed amalgamation will be carried out in furtherance of a proposal of the Singer group of companies to streamline the group structure by rationalising the number of operating companies. 

This is with a view to: eliminating undue value leakages in optimising cost synergies, thereby enhancing profitability of the Singer group of companies and returns of the shareholders; minimising duplication of management functions, thereby ensuring operational efficiency; and benefiting from stronger financial strength with an increased asset base.

The Board of Directors is of the view that this proposed amalgamation will enable the Singer group of companies to operationally and strategically drive planned value creation. Since the activities of the three companies are interdependent, bringing them under one entity would eliminate complexity arising from transfer pricing and other duplication of costs. The Board of Directors strongly believes that this proposal is beneficial to all shareholders of the three entities, who would be the beneficiaries of enhanced value creation.

The proposed amalgamation of the companies will allow the consolidation of the businesses of the three companies under «Singer (Sri Lanka) PLC».

Subsequent to the proposed amalgamation, Singer (Sri Lanka) PLC would become the amalgamated company, with the particulars of Regnis (Lanka) PLC and Singer Industries (Ceylon) PLC being removed from the register maintained by the Registrar General of Companies.

Shares in the amalgamated company (i.e. Singer (Sri Lanka) PLC) will be issued to the minority shareholders of Regnis (Lanka) PLC and Singer Industries (Ceylon) PLC based on the fair values of the shares of the three companies determined based on an independent valuation carried out by Acuity Partners Ltd.

The report was dated 3 November 2023 and financial statements as at 31 March 2023 and 30th September 2023 have been referred to in their evaluation. Accordingly, shares of the amalgamated company will be issued to:

(i) the minority shareholders of Regnis (Lanka) PLC on the basis of 3.6544877 new ordinary voting shares in Singer (Sri Lanka) PLC for every one (1) ordinary voting share held in Regnis (Lanka) PLC, with any fractions arising from the computation of shares to be issued being rounded up to the nearest whole share; and (ii) the minority shareholders of Singer Industries (Ceylon) PLC on the basis of 2.6735504 new ordinary voting shares in Singer (Sri Lanka) PLC for every one (1) ordinary voting share held in Singer Industries (Ceylon) PLC, with any fractions arising from the computation of shares to be issued being rounded up to the nearest whole share.

Accordingly, up to a maximum of 40,916,524 new ordinary voting shares in Singer (Sri Lanka) PLC will be issued to the minority shareholders of Regnis (34,348,701 new ordinary voting shares in Singer (Sri Lanka) PLC) and Singer Industries (6,567,823 new ordinary voting shares in Singer (Sri Lanka) PLC)

pursuant to the proposed amalgamation.