- Acquires Wincon Development Ceylon for Rs. 2.17 b; raises Rs. 2.42 b via Rights Issue
Integrated infrastructure and engineering solutions provider MTD Walkers PLC, recently completed the 100% acquisition of Wincon Development Ceylon Ltd for a consideration of Rs. 2.17 billion, marking its foray into real estate and property development. MTD Walkers PLC raised Rs. 2.42 billion on the recently oversubscribed rights issue.
Wincon Development Ceylon Ltd is a company registered with the Board of Investment of Sri Lanka, for the purpose of constructing approximately 25,000 homes under the Nila Sevana public servants housing project. The company has built over 1,000 affordable apartment units in the Galle District (512 in Wakunugoda and 576 in Habaraduwa) which will be available for sale in the near future. Although public sector employees are given preferred pricing, the homes are available for the private sector as well; unit prices vary from Rs. 2 to 5 million.
Wakunagoda is approximately 3 kilometres from Galle town and within 1.5 kilometres from the prestigious Richmond College. The 512 homes at Wakunagoda are available in a three bedroom 695 square foot home priced between Rs. 3.2 to 3.7 million or in a three bedroom 776 square foot home prices between Rs. 3.8 to 4.5 million. The community offers landscaped gardens with play areas for children, proximity to public transport, spectacular views from the top floors and is within the Galle Municipal Council area.
As per the tripartite agreement between the Board of Investment of Sri Lanka, Wincon and the Ministry of Public Administration, the Nila Sevana public servants housing project will extend to all districts to meet the growing demand for quality built, affordable homes for public sector employees. According to Wincon Development Ceylon management, the next project will commence in Kundasale, Kandy, for which several thousand inquiries have been made. Reservations for the Kandy project will be taken soon, as it is already in the design phase with construction planned for mid-2015.
The acquisition of Wincon Development Ceylon Ltd is the latest move by MTD Walkers PLC to expand and diversify into areas related to its core business, as the company establishes itself on a path of sustainable growth that reflect the companyâ€™s strength.
Commenting on the acquisition, MTD Walkers PLC Executive Deputy Chairman Jehan Amaratunga stated: â€śIncreasing land prices have already restricted villa and plotted developments to fringe areas of the city, and such developments will be pushed even further out as land becomes more expensive. The growing demand for commercial office spaces, retail establishments, high rise condominiums and increasing per capita income of the country makes real estate the right business to be in considering the Groupâ€™s vision. To reflect our investment in the sector, Wincon will be renamed Walkers CML Properties.â€ť
MTD Walkers PLC Head of Corporate Finance and Treasury Mahesh Yogarajan commented saying, â€śWith the acquisition of Wincon through the rights issue, MTD Walkers PLC is ideally positioned as a serious real estate player, with a large inventory of apartments for sale, with cash inflows ahead helping to further strengthen our balance sheet and liquidity position. The unique position Walkers CML Properties will have is the ability to leverage on our building construction, piling and mechanical engineering businesses to generate high returns for shareholders. We are committed to supporting the national program of accelerated housing development for the public sector through the Nilasevana Project. Further, to balance our real estate portfolio we are also actively evaluating joint ventures to develop private properties, whilst also unlocking value through utilisation of our own land bank for projects.â€ť
MTD Walkers is believed to be the countryâ€™s only infrastructure developer able to perform the entire spectrum of infrastructure development activities through its seven subsidiaries, specialised in civil, mechanical and electrical engineering, power generation and now, real estate.