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DPL's MANAGEMENT STAFF IN MOVE TO BUY REMAINING RPC STAKE
-08-12-2004-
Dipped
Products Limited (DPL) the Hayleys Group's rubber glove manufacturing
venture yesterday informed the Colombo Stock Exchange that a group of
management staff plans to acquire the remaining DPL shares held by
Richard Pieris and Company Limited. This follows the divestiture last
week by Richard Pieris of a trench of 5.88 million DPL shares,
representing 19.6 per cent of the capital of the company.These shares
were purchased by Hayleys and its associates. In a letter to the CSE,
Dipped Products announced that over 110 of the company's management
staff are in the course of finalising an agreement between themselves
and Aureos South Asia Fund 1 LLC to establish a "special purpose
vehicle" named DMH Capital Limited, to purchase 2,993,400 shares in the
Company now owned by Richard Pieris & Company Limited, at a price of Rs
117/50 per share.
"Aureos have advised us that they have already entered into an agreement
with Richard Pieris & Company Limited in this regard which anticipates
that the proposed transaction will be completed by the 15th of December
2004," the announcement said. The DPL Group which comprises rubber glove
manufacturing, distribution and marketing and plantations posted a
strong performance in the first half of 2004-05, with consolidated
financial results showing noteworthy growth in turnover and profit. The
Group reported a post tax profit growth of 66 per cent over the first
half of 2003, on a turnover of Rs 2.9 Billion, which was up 18 per cent.
The hand protection segment contributed Rs 2.2 Billion of this turnover
(up 22.3 per cent) and the plantation sector represented by Kelani
Valley Plantations Ltd., (KVPL) contributed Rs 779.2 million consequent
to a growth of 6.3 per cent. Consolidated pre tax profit totaled Rs
290.7 million, reflecting a growth of 43 per cent, while post tax profit
topped Rs 255.9 million, an increase of Rs 101.5 million over the
corresponding period last year.
KVPL more
than doubled its post tax profit, from Rs 40 million to Rs 89 million,
as a result of buoyant rubber prices and consistent prices for tea. DPL
Managing Director N. G. Wickremeratne described the company's
performance in the first half of the year as satisfactory in the
backdrop of the cost overruns in the construction of its medical glove
plant in Thailand. The completion of construction has been delayed by
more than a month due to rain and DPL has had to seek the approval of
the Central Bank of Sri Lanka to remit additional funds to meet a cost
overrun of nearly 30 per cent, he disclosed. Meanwhile, there is also
some concern about the outbreak of violence in the southern part of the
country, although the Shongkhla Province where the DPL factory is
situated has not been directly affected, Mr. Wickremeratne said.
Construction and installation of the plant is now expected to be
completed by the end of the year, with trial production expected to
commence by early January. Mr. Wickremeratne cautioned that the second
half of the year could see other challenges. Anticipated earnings from
the plantation sector, for example, would be adversely affected by the
wage increase offered to estate workers in October this year.
However, the
strong growth achieved by DPL's rubber glove manufacturing operations is
noteworthy in the context of the increased rubber prices which affect
their costs of production, he said. The segment's results have been
attributed partly to the growth in turnover of DPL's Italian
distribution and marketing company ICO Guanti SpA, while exchange gains
from the devaluation of the Rupee against the Dollar helped offset some
of the escalation in production costs. The Board of Directors of Dipped
Products Limited comprises Messrs R. Yatawara (Chairman), N. G.
Wickremeratne (Deputy Chairman/Managing Director), H. A. Peiris, R. W.
Soysa, J. A. G. Anandarajah, Dr. W. S. E. Fernando, G. K. Seneviratne,
A. D. B. Talwatte, Dr. S. Yaddehige and N. Y. Fernando.
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