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Tuesday, 24 November 2015 01:27 - - {{hitsCtrl.values.hits}}
IWS Holdings Ltd., of Arthur Senanayake-fame, has fully taken over the ownership of APL Lanka Ltd., a leader in shipping agency business with an investment of Rs. 2.4 billion.
The deal is the biggest in the local shipping agency industry, Senanayake and IWS becomes the first Sri Lankan to buyout a foreign principal. In the latter context, it is also the largest deal.
Senanayake, a well respected businessman, holds significant portfolios of business varying from television broadcasting, motor car franchises, communications, IT, transportation and warehousing including logistics hubs via IWS Holdings.
The full takeover follows IWS buying 40% stake in APL Lanka for Rs. 2.38 billion on Monday held by APL Co Singapore. Previously he held 60% stake acquired at different stages of APL Lanka operations. With the completion of the deal, APL Lanka’s new valuation is over Rs. 5 billion.
APL or American President Lines Co. is a fully owned subsidiary of NOL Group of Singapore. APL began operations in Sri Lanka 23 years ago and uses Sri Lanka as a major transshipment cargo hub.
In a filing to the Singapore Stock Exchange NOL confirmed the divestiture. It said “APL will continue to appoint APL Lanka as its agent in Sri Lanka, which remains a very important market and transportation hub for APL.”
“As of 31 March 2015, the audited net asset value of APL Lanka was approximately $16.1million (Rs. 2.27billion). The total consideration for the transaction was $ 16.9million (Rs. 2.38billion) and arrived after arm’s length negotiations on a willing-buyer, willing-seller basis,” NOL added.
Interestingly the acquisition also comes when the Government on Friday via 2016 Budget announced moves to liberalise ownership in freight forwarding and logistics business to foreign firms.
Post acquisition IWS Holdings is expected to use its reputation and connections to leverage the new APL Lanka’s customer base, broadening it to achieve better economic results in the future.
APL with IWS Logistics arm will also be able to provide to enhance excellent service to the Sri Lankan customers. APL Co in Singapore has also appointed two expatriates to support commercial as well as operational activities.
Senanayake is also a shareholder of APL Logistics Freight Forwarding Company Ltd., which was sold to a well known freight forwarding company. Globally, APL Logistics was sold early this to Kintetsu World Express Inc, Japan for approximately $ 1.2 billion.
Last month APL was named Container Line of the Year and won the Investment in the Future Award at the Lloyd’s List Asia Awards 2015.
