Tuesday, 15 October 2013 00:18
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All customers with maturing Thailand agarwood contracts entered into in Sri Lanka are to be settled within 8 months on a three tier payment scheme
Full exposure is estimated at Rs. 300 m; claims by agarwood customers serving notice is around Rs. 54 m
TWOD Chairman and CEO Lanka Wijendra Kiwlegedara submits affidavit to Court assuring cash infusion of Rs. 200 m in three months and $ 10 m in six months from investors/lenders to undertake repayment without selling assets
Touchwood Investments Plc (TWOD) via its lawyers yesterday presented to Commercial High Court a full repayment plan on all maturing agarwood contracts executed in Sri Lanka with regard to plantations in Thailand.
As per the plan, TWOD will pay 100% due to agarwood plantation customers within eight months on the basis of 25% in three months, 25% in five months and the balance 50% in eight months.
When the case (HC Civil 31/2013/CO) was taken up in Commercial High Court of Colombo before Justice C. Morias yesterday, the company has agreed to extend this offer to all agarwood contracts (irrespective of whether their claims have been recorded in this case or not in Commercial High Court.)
Around 26 customers have supported the winding up application and appointment of provisional liquidator filed by customer K.A.D.L. Priyanka Nanayakkara whose claim against TWOD is Rs. 3.8 million.
Court on 3 October granted the company time till 14 October to file its formal objections to the application to appoint a Provisional Liquidator.
TWOD’s exposure on agarwood contracts is estimated at approximately Rs. 300 million and amount due for some of the customers within the 26 who had resorted legal action is around Rs. 54 million.
Given the fact that some within the 26 have local plantation contracts, the Court was told that maturity of those was far off and the company has adequate time.
The repayment plan submitted to Court was embodied in the Statement of Objections filed along with the supporting affidavit deposed to by TWOD Chairman and CEO Lanka Wijendra Kiwlegedara.
His affidavit states that efforts are underway to ensure a cash infusion of Rs. 200 million within three months and a further $ 10 million within six months. Assurance of cash infusion from investors/lenders is to retain assets as they are.
Avindra Rodrigo, Senior Counsel for the Petitioner and several Counsels appearing for the claimants before Court expressed their optimism on the repayment plan and requested Court for time to obtain instructions from their clients. Court fixed the matter to be called on 31 October 2013.
President’s Counsel Dr. Harsha Cabraal appearing for the SEC informed the Court the SEC was taking the same stand that it had on the last date of hearing (3 October) by opposing any application to wind up the Company at this point of time.
President’s Counsel Harsha Amarasekera with Shehan Gunaratne and Tivanka Ekaratne, Attorneys-at-Law, appeared for Touchwood Investments PLC. Avindra Rodrigo, Attorney-at-Law, appeared for the Petitioner.
Previously there have been concerns that TWOD was endeavouring to buy time whilst the petitioner sought provisional liquidator to safeguard assets from being sold.
The company has been beset with acute cash flow problems in recent months forcing resignation of Chairman and Vice Chairperson Mr. and Mrs. Maloney who however remain on the Board. Both are overseas at present. -
The TWOD Board has also seen multiple changes. This, along with ongoing investigations by the SEC, has led to loss of investor and creditor confidence in TWOD.
A pioneer of the agro-forestry investment industry in Sri Lanka, TWOD specialises in the cultivation of the high value exotic tropical timbers as an alternative and sustainable source of forest products.
As per its 2012/13 Annual Report, TWOD has planted over 400 trees of high-value timber in 2,854 acres spanning 42 plantations in six districts. This is in addition to timber plantation in Thailand in which customer deposits have been taken by the company.
As at end FY13, TWOD’s assets amounted to Rs. 8 billion, up from Rs. 6.8 billion in the previous year. Despite styling itself as pioneer and in business for over decade, TWOD remains saddled with over Rs. 500 million worth retained losses. Liabilities amounted to Rs. 4.7 billion as at end FY 13, up from Rs 3.7 billion a year earlier.
