Overseas Realty invests Rs. 3.9 b to buy up subsidiary Mireka

Monday, 2 January 2017 00:20 - - {{hitsCtrl.values.hits}}

BOC sells 40% stake at hefty profit, sale approved by Ministry

Overseas Realty (Ceylon) Plc last week completed the acquisition of a minority 40% stake in its subsidiary Mireka Capital Land Ltd. for Rs. 3.88 billion.

With the move Mireka becomes a fully-owned subsidiary and the new arrangement will help Overseas Realty Group forge ahead with its new expansion plans.

The price for the 40% (75 million shares) was determined by an independent valuer. ORCL used internal funds for the acquisition. Investment of 60% was stated at Rs. 1.5 billion in ORCL’s accounts and in BOC accounts it was Rs. 750 million at the Bank level and Rs. 1.2 billion at the Group level.

The sale, which was duly approved by the Public Enterprise Development, has enabled BOC to book a hefty capital gain and thereby augments its capital, the same rationale for going ahead with the sale of stake in Seylan Bank for Rs. 1.3 billion but later cancelled due to an alleged lack of approval.

Mireka handles all residential and commercial developments at Havelock City.

Last week it broke ground for Mireka Tower, a 46-storey 600,000 square foot office tower with a 200,000 square foot shopping mall with an investment of $ 166 million. The project will be completed by 2020.

The ORCL ‘s Rights Issue is also due for completion in January. The Rights, on the basis of two for every five held at Rs. 20.50, will raise Rs. 7.3 billion.