Mackwoods sells control of Agalawatte Plantations to Browns for Rs. 304 m

The controlling interest of Agalawatte Plantations Plc was sold yesterday by Mackwoods Plantations Ltd., for Rs. 304 million to Browns Group, a move justified by the seller, but the estranged owners of under dispute Mackwoods Securities cried foul. 

Yesterday a 60.8% stake of 15.2 million shares of Agalawatte traded via crossing at Rs. 20 per share. 

In a filing to the CSE, Mackwoods Plantations Ltd., confirmed the sale to Browns. 

In a statement to media, Mackwoods Plantations said it sold out due to serious industry downturn. “As has been widely reported, domestically and internationally, the global commodities crash in the past few years, the Russian Crisis and subsequent depreciation of the Rouble, reduced the buying power of Russia and CIS countries. This was further aggravated by the oil price crash, which reduced the buying power of the Middle East Countries, and in addition substantially impacted the rubber industry, as the falling oil price allows for synthetic rubber substitutes to replace natural rubber. This has aggravated the strain in particular for those plantations Companies with predominantly rubber exposure, including Agalawatte Plantations PLC,” the statement said.

“The transaction was formally authorised and effected by the shareholders of Mackwoods Plantations Ltd. The shares, worth Rs. 304 million were purchased by the Browns Group,” the statement said.

“Given the severe financial impact of the commodities crisis on Agalawatte Plantations PLC, it was felt both prudent and timely to divest its shares to the Browns Group, which is already in the plantation sector of Sri Lanka,” it added.

Majority shareholders of Mackwoods Securities, the holding company, charged that the control of Agalawatte was sold without their knowledge.

It is learnt that the majority shareholders had written to both Colombo Stock Exchange and the Securities and Exchange Commission to stop the proceeds of this transaction falling into the hands of Dr. Chris Nonis and his backers. 

However, sources close to Dr. Nonis claimed that Mackwood Plantations given the vertical structure of holding company Mackwood Securities was very distant, and majority shareholders of Mackwood Plantations including foreign shareholders had approved it given the dire need for cash. It was alleged that the on-going dispute between Chris and his sister Nirmalee now fought legally, had forced the sale though other party denied it and charged it was high handedness by the former diplomat.

The recent EGM and appointment of three nominee directors to Mackwood Securities are being legally contested taking the family dispute public.