Free Lanka Capital IPO opens today

The Rs. 1.5 billion worth Initial Public Offering (IPO) of Free Lanka Capital Holdings (FLCH) will have its official opening today.

The Company is issuing a 22% stake or 300 million ordinary shares at Rs. 5 each via the IPO. Inviting the public to invest with a minimum of 2,000 shares (at a cost of Rs. 10,000), the Company will be listed on the Diri Savi Board.

The Company also said it will comply with the Securities and Exchange Commission’s new rule with regard to the basis of allotment favouring individual retail investors.

The Rs. 1.5 billion proceeds from the IPO will be used on the basis of Rs. 600 m to be invested for further expansion of mini hydro, Rs. 600 m to build a commercial property in Borella with 80,000 square feet of rentable space and Rs. 250 m to build two boutique hotels with 90 rooms.  

FLCH, which is a joint venture between Browns Investments Ltd and Perpetual Holdings Ltd., through its subsidiaries owns Maturata and Pussellawa plantations and manages over 23,000 hectares of tea and rubber comprising of a total of 43 estates.

The FLCH Group also has a growing footprint in mini hydro power via its Hydro Power Free Lanka Plc (HPFL). It currently generates 3.2 MW of power through two units and is in the process of expanding with four units with a total capacity of 5.37MW bringing the total to be connected to the national grid to 8.75MW by April 2012.

Using proceeds from the IPO the Group will further expand by developing 7 more mini hydro power plants boosting generation by another 7.45 MW. By end 2013, the Group envisages a total of 16.02 MW of hydro power connected to the national grid.

It is also venturing into the leisure sector with two boutique hotels collectively having around 90 star class rooms in scenic locations of Pussellawa Plantations situated in Giragama in Kandy and Ayr in Padukka. Its real estate foray would be by setting up a commercial property complex in Borella comprising 80,000 square feet of rentable space.