Laugfs mulls rights issue, listing subsidiaries

Monday, 6 June 2011 00:00 - - {{hitsCtrl.values.hits}}

May list most of itssubsidiaries to raise funds

Aiming to catch post-war growth in auto industry

Reuters: Sri Lanka’s energy-led conglomerate Laugfs Gas said it may go for rights issue or list its subsidiaries on the Colombo Stock Exchange to raise money for post-war expansion.

The fast-diversifying conglomerate, which has operations in LP gas, consumer and petroleum retailing, lubricants, leisure, and rubber products, has planned a number of new projects to capitalise on Sri Lanka’s post-war economic growth momentum.

“Raising fund is not an issue,” Laugfs Chairman W.K.H. Wegapitiya told Reuters in an interview. “We will go for rights issues and we will list some of our companies in the stock exchange. If possible, we will list almost all companies.”

However, when asked about the timing for rights issue and further maximum listing of 14 subsidiaries under its 18-firm group of companies, Wegapitiya said: “It is too early to say.”

Laugfs in August listed four firms via initial public offering, raising Rs. 2.5 billion ($ 22.7 million).

The firm posted a 90 per cent jump in its net profit of Rs. 1 billion for the year ended on 31 March. Wegapitiya is aiming to double profits this year, capitalising on an influx of vehicles into Sri Lanka.

“We have some investments in negotiation which can’t be disclosed now and if they realise, we will surpass the Rs. 2 billion ($ 18.2 million) mark,” he said.

The firm is planning to build a 100-room five-star hotel on Sri Lanka’s north western coast with Rs. 850 million and a Rs. 450 million office-apartment complex in the capital Colombo, aiming to capture real estate and tourism growth.

It is also expanding its consumer retail business, hydropower, natural rubber product exports, and lubricant sales, he said.