Home / Energy/ Resus Energy to merge with three subsidiaries to boost shareholder returns

Resus Energy to merge with three subsidiaries to boost shareholder returns

Comments / {{hitsCtrl.values.hits}} Views / Monday, 31 December 2018 01:29


Resus Energy Plc, a renewable energy investment and development company, has decided to amalgamate itself with three wholly-owned subsidiaries effective 28 February 2019 to boost shareholder returns. 

The three subsidiaries are Giddawa Hydro Power Ltd., Upper Agra Oya Hydro Power Ltd., and Okanda Power Grid Ltd. 

Resus said at present each of the subsidiaries operates a mini hydro power plant with an aggregate capacity generation of seven megawatts. The entirety of electricity generated through the power plants is supplied by the subsidiaries to CEB under a power purchase agreement.

At present electricity generated by Giddawa ( 2 MW) and Upper Agra (2.6 MW) are supplied to CEB on the avoided-cost based tariff scheme. In the event the agreements are renewed by the CEB in October 2023 and February 2021 respectively, it is likely that they will be renewed at a significantly lower tariff scheme. Therefore Giddawa and Upper Agra would potentially have difficulty in managing their projects on a standalone basis in the future and continuation of the operations is likely to be challenging.

The Resus Board also notes that the efficiency, productiveness and efficacy of the three projects can be substantially improved if the operational and administrative functions are streamlines and centralised, reducing duplication of functions and associated costs. 

The Board expects that the amalgamation will result in increased profits of the company, thereby optimising shareholder returns. 

Resus’s net assets are worth Rs. 354.1 million, and that of Giddawa is Rs. 235.8 million, Upper Agra Rs. 206.8 million and Okanda Rs. 287.6 million. The amalgamation will increase the net assets to Rs. 737.2 million.

An Extraordinary General Meeting has been called for 18 January to get shareholder approval for the amalgamation move.

For the six months ended on 30 September 2018, Resus Energy Group revenue was Rs. 280.8 million, up by 39% and pre-tax profit was Rs. 122.3 million, up by 111%. Bottom line attributable to equity holders of parent was Rs. 107.4 million, up by 107% from a year earlier.

AC Cables Plc holds a 32.5% stake in Resus Energy and Trydan Partners Ltd. owns a 32% stake followed by Ayenka Holdings with 12.7% and ETF with 2.7%.

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Poignant pondering on a patriarch

Monday, 22 April 2019

Almost five months have gone. It is with a profound sense of sadness that we experienced the demise of our veteran teacher, respected author, legal luminary, an accomplished ambassador, an eminent public servant and an amazing human being, Dr. Wickre

Enemies of democracy – Part I Demand for a strongman to rule the country

Monday, 22 April 2019

I posed the following question to a group of university students recently: ‘Do you desire to have a strongman to rule Sri Lanka today?’ The students, made up of both genders in the age group of 25 to 35, chorused the answer in the affirmative. Wh

The sad demise of Jet Airways

Monday, 22 April 2019

Jet Airways of India, once the premier full-service carrier of the sub-continent, has ceased operations. “Jet Airways and its Board of Directors have been forced to take this extreme measure, as prolonged and sustained efforts with lenders and auth

No more stones to break Sri Lankan bones

Friday, 19 April 2019

Trial by fire is not a new ordeal to Christian community. It predates Notre Dame and Nazism by millennia. In fact, a decade or so before Nero torched believers to light Roman avenues, Jewish religious leaders put Jesus-followers to the test as the Ch

Columnists More