Softlogic to enter insurance?

Friday, 8 July 2011 03:45 -     - {{hitsCtrl.values.hits}}

New entrant to the league of listed diversified groups, Softlogic Holdings is tipped to enter the insurance business, the Daily FT learns.

The entry which will be a strategic fit to the Softlogic Group financial services, healthcare and retail businesses is speculated to be via taking control of a  heavy on life but composite listed small insurance entity with a fairly sizeable fund base and good prospects.

Of late given high competition, upcoming regulatory requirements and lower than desired take off in overall insurance business, industry analysts have flagged off several players for probable acquisitions as part of consolidation.

Market talk was that if the deal is firmed up either of the parties will make a disclosure today. Those in the know of negotiations as well as Softlogic remained tight lipped  about market talk.

Meanwhile the Colombo Stock Exchange yesterday announced shares of Softlogic Holdings Ltd., classified under Diversified Holdings Sector will be listed for trading on the Diri Savi Board from Monday 12 July.

Via its IPO of Softlogic made available 139 million shares at Rs. 29 each raising Rs. 4 billion to retire debt as well as fund some of its expansion and diversification of business. The IPO was oversubscribed by over 4 times.

Since its launch in 1991, the group has largely progressed — expanding into a number of sectors including ICT, Retail, Healthcare, Leisure, Automobile and Financial Services Sectors as well. Group turnover is estimated to have doubled to Rs. 10 billion in FY2011 from Rs 4.8 billion in the previous year and profit improving from Rs. 155 million to Rs. 900 million (forecast).