DCSL-Melstacorp deal gets SEC nod

Friday, 30 March 2018 00:00 - - {{hitsCtrl.values.hits}}

The Securities and Exchange Commission has approved the off-the-floor transfer of approximately 7.5% of Distilleries Company (DCSL) shares to the shareholders of Melstacorp Plc as of the ex-dividend date. Melstacorp announced in February this year that it would give eight DCSL Plc shares for every 27 Melstacorp Plc shares held as a dividend in specie.

This will allow the recommencement of trading of the DCSL Plc share on the Colombo Stock Exchange. The share was suspended on the request of the company in August 2016 to facilitate a swap of shares that made Melstacorp Plc the holding company of the group which also owns DCSL Plc.

The other companies Melstacorp Plc owns include Lanka Bell Ltd, Continental Insurance Lanka Ltd, Melsta Regal Finance Ltd, Melsta Logistics Ltd, Balangoda Plantations Plc and Madulsima Plantations Plc. Melstacorp Plc also owns almost 50% of the listed diversified conglomerate Aitken Spence & Co. Plc. Harry Jayawardena is the Chairman of the Melstacorp Group.

Sources from Melstacorp Plc expect the DCSL share to trade at much higher multiples than the multiple the company had when it was a diversified company. DCSL Plc now is purely a liquor manufacturing and marketing company. Internationally listed liquor companies trade at very high multiples compared to other sectors.