Cargills goes for investment holding company status; retail ops go to subsidiary
Friday, 30 August 2013 03:10
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EGM convened on 20 September for shareholder approval
Cargills (Ceylon) Plc has decided to become an investment holding company by restructuring the retail operations to be handled by a subsidiary.
The Board at its meeting on Wednesday resolved that retail specific properties, moveable fixed assets and current assets specific to retail operations, their non-current and current liabilities and Cargills Food City and Cargills Food City Express brand names transferred to fully-owned subsidiary Cargills Foods Company Ltd., based on an independent valuation.
The retail business accounted for around 80% of Cargills Group revenue of Rs. 44.2 billion in FY13 and EBIT of Rs. 1.68 billion. Subsequent to the restructure, Cargills Foods Company Ltd. will carry out the retail operations of the Group which consists of 219 retail locations as at 30 June 2013. Cargills Ceylon Plc will cease to carry out the retail operations and will continue as a pure investment holding company for retail, food, manufacturing, brewery, leisure and property development and strategic investment sectors of the Group.
The Cargills Board also confirmed that post transaction the company will remain solvent.
Since the proposed move will result in a substantial change in the nature of the business of the company, an EGM has been called for 20 September to obtain shareholder approval.
A solitary share of Cargills traded yesterday for Rs. 159.90, up by Rs. 9.90.
