Nawaloka buys control of Millennium Housing for Rs. 459 m
Saturday, 11 October 2014 00:25
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Nation Lanka divests 68% stake with Rs. 306 m capital gain
Nawaloka Holdings Ltd. yesterday bought 68% controlling interest in Millennium Housing Developers Plc for Rs. 459 million with the seller Nation Lanka Finance booking hefty capital gain.
Nawaloka Construction Ltd. bought 53 million shares or 39.35% stake at Rs. 5 per share and related party Ceyoka Ltd. bought 38 million shares or 28.28% stake. The latter is an associate of Nawaloka Holdings Ltd. Buyer and seller and acquired company share one or more common directors.
The seller, Nation Lanka Finance Plc, said the divestiture was carried out with the approval of the Central Bank. It said following the sale, it expects to recognise Rs. 305.8 million as a direct gain in financial statements. This represents a Rs. 1.22 increase in the Net Asset Value per share of Nation Lanka Finance. With this capital gain, Nation Lanka Finance is poised to make significant profits for the current financial year ending on 31 March 2015 compared to a Rs. 23.6 million net profit posted in FY14.
The Net Asset Per Share of Millennium Housing Developers at Group level is Rs. 4.56 as at September 2014, down from Rs. 5.18 as at FY14. At Company level it was Rs. 3.64 down from Rs. 4.13.
In the quarter ended 30 September 2014, the highest price traded was Rs. 7.20 and the lowest was Rs. 5.50 with the closing value being Rs. 6.10.
Millennium Housing Chairman Harshith Dharmadasa is also a director at Nawaloka Holdings. He is also a director at Nation Lanka Finance whilst Nawaloka Constructions owns 7% stake in the company.
The group has assets worth Rs. 1.14 billion and liabilities of Rs. 530 million.
In the six months ended on 30 September 2014, the company posted revenue of Rs. 127 million, down from Rs. 314 million a year earlier. Operating loss was Rs. 18 million, as against a profit of Rs. 62 million in the first half of FY14. The group’s net loss was Rs. 9 million, as opposed to Rs. 67 million profit a year earlier.
With the acquisition, Nawaloka Construction will make a mandatory offer to buy remaining shareholding as per the SEC’s Takeovers and Mergers Code. Other major shareholders of Millennium Housing include Anilana Hotels and Properties (8.85%), Arrow International Ltd. (4.45%) and Ceybank Unit Trust (1.52%).
