Kotagala takes over Union Commodities in Rs. 1.6 b deal

Saturday, 22 December 2012 00:14 - - {{hitsCtrl.values.hits}}

Kotagala Plantations Plc (KOTA) has acquired 100% control of Union Commodities Ltd. (Unicom) in a Rs. 1.575 billion deal.

The stake amounted to six million shares and the deal reflects a Rs. 262.50 per share.

Established in 1985, Unicom is a leading local tea exporter, currently ranked as the fourth largest Sri Lankan tea exporter. In addition to tea, the company is also involved in exporting of several other commodities and food items.

Unicom founder Chanaka de Silva will remain as the Chairman and the remaining Directors will continue as well. KOTA will appoint its nominees to the Unicom Board to pursue synergies arising from its tea plantation business.

Unicom enjoys a state-of-the-art self-sufficient factory with an in-house advanced tea bagging facility, onsite purpose-built storage facility, packaging facilities, and a shipping and a freight forwarding company fully-owned by the Group located in Kelaniya. The company also exports other commodities and food items such as sesame, cloves, pepper, etc.

KOTA is one of the largest regional plantation companies involved in the cultivation and production of tea and rubber. Kotagala comprises of 12 tea plantations and 11 rubber plantations with the bulk of the company’s tea cultivated in the Western High Grown Dimbulla District and in the Low Grown Kalutara District. KOTA’s managing agents are Lankem Tea and Rubber Plantations Ltd.

KOTA’s total assets as at end September 2012 was Rs. 7.38 up from Rs. 6 billion a year earlier. Its shareholders funds amounted to Rs. 2.6 billion inclusive of Rs. 2 billion in accumulated profit. Current liabilities amounted to Rs. 2.19 billion, up from Rs. 1.3 billion and non-current figure was Rs. 2.56 billion as at end September 2012, same as a year earlier.

Lankem Plantation Holdings owns a 38% stake in KOTA whilst related party Lankem Tea and Rubber Plantations holds a 30% stake.