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20 February, 2013 07:31 AM Source: Financial Times - Sri Lanka

Royal Ceramics Plc (RCL) has decided to sell its 51% stake in Asia Siyaka Commodities Ltd., to Lanka Commodity Brokers for Rs. 371 million, above Rs. 34 million from its original purchase price early last year.

The sale of the stake will be on a staggered basis between March 5 and end June as the SEC had imposed some limitations given the fact that Asiya Siyaka got listed via an introduction late last year.

RCL bought the Asia Siyaka stake amounting to 132.6 million shares in April last year for Rs. 337.6 million. The venture also has a whole owned warehousing facility. Asia bought 100% stake of Produce Brokers Ltd., in October for Rs. 7.1 million.

Despite the purchase originally with perceived synergies given RCL’s connections with plantations-rich Hayleys Plc, the new acquisition hadn’t benefitted as envisaged. The exit will benefit RCL considerably going forward apart from commodity broking not being part of its core business.

As at 31 December 2012, for nine moths Asia’s revenue was Rs. 237.7 million whilst net profit was Rs. 56.8 million.

Administrative expenses amounted to Rs. 184 million and bottom line had been helped by finance income of Rs. 79 million.
Tea broking industry analysts said acquisition of Asia Siyaka will consolidate Lanka Commodities’ position to be a leading contender. More...

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