Harry scouting to divest 28.6% Lanka Hospitals stake

Monday, 7 February 2011 02:43 - - {{hitsCtrl.values.hits}}

Business tycoon Harry Jayawardena-controlled Distilleries Company (DCSL) is in the market scouting for prospective buyers for his 28.6% stake in Lanka Hospitals Corporation (LHC), formerly Apollo Sri Lanka.

DCSL is the second largest and single largest private sector shareholder in LHC with Sri Lanka Insurance Corporation controlling 61%.

LHC was once a subsidiary of Distilleries on account of its investment in SLIC. Following the re-divestiture of SLIC with the State, Distilleries has been exploring options to exit from LHC.

Market talk was that DCSL is discussing a possible sale with several parties including Bank of Ceylon (BOC), the parent of LHC’s existing shareholder Property Development Plc, (PDL) owning 9.53% stake.

It is learnt that Distilleries’ asking price is between Rs. 60 and Rs. 65 per share, which appears to be at a premium to its Net Asset Per Share as well as market price. However, this is on account of strong prospects via LHC for a strategic investor, whilst there is a view that LHC shares are highly undervalued and underrated by investors and brokers.

LHC’s 52-week highest share price is Rs. 42.75 whilst last week it closed at Rs. 36.20, down by Rs. 2 from the previous week. Voting stock of Durdans closed at Rs. Rs. 102. Its net asset per share however is much higher at Rs. 57 as opposed to LHC’s Rs. 10.

Distilleries had paid Rs. 28 per share in late 2006 to acquire LHC shares.

Now led by a powerful and competent Board chaired by Defence Secretary Gotabaya Rajapaksa, LHC in the nine months ended 30 September 2010, saw its revenue rise to Rs. 2.3 billion from Rs. 1.78 billion a year earlier. Net profit had swelled to Rs. 168.2 million from Rs. 30.9 million.

Exploring to exit from LHC is the third exercise by Distilleries as it has called for bids for 99% stake in Lanka Bell as well as controlling 70% stake in unit trust management company NAMAL.

Softlogic gets 51.7% control of Asiri Hospitals

Softlogic Holdings Ltd., has got control of 51.7% stake in Asia Hospital Holdings Plc.

The development follows the mandatory offer at Rs. 9 per share from Softlogic to Asiri shareholders ending on 1 February with shareholders owning 10.6% stake amounting to 94 million shares worth Rs. 846 million accepting it. During the offer period Softlogic had also acquired 4.7% stake amounting to 41.77 million at Rs. 9 per share in a deal worth Rs. 376 million.

Prior to the mandatory offer, Softlogic held 36.42% and the new holding is 51.7% for which the cost is Rs. 1.2 billion.