ECONOMYNEXT – RIL Property Limited (RIL), which owns and operates commercial office space in the Sri Lankan capital Colombo, said it had acquired 30.27 million shares in United Motors Lanka (UML) for Rs2.36 billion.
A stock exchange filing said RIL bought the shares from UML’s major shareholder M. A. Yaseen at Rs78 a share.
The stake represents 30% of the 61.2% voting rights held by Yaseen in UML which has agencies for Mitsubishi and Perodua.
RIL said it would proceed with a mandatory offer to remaining shareholders of UML.
RIL intends to buy more shares from Yaseen to raise its stake to 51% in UML if it fails to get enough acceptances to the offer from minority shareholders.
RIL said that buying UML would enable it to use 280 perches of freehold land owned by UML adjoining RIL’s land plot.
This enhances the availability of land stock for real estate development close to RIL’s main Parkland property, it said.
“Strong cash flow and healthy dividend track record of UML is expected to strengthen cash flows of RIL group,” the statement also said.
“Additional freehold land stock of over 17 acres owned by UML in Colombo’s suburbs with more rationalised usage could offer potential opportunities to augment property management efficiencies and improve yields.”
(COLOMBO, November 08, 2017)