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Wednesday, 27 October 2010 01:34 - - {{hitsCtrl.values.hits}}
Parquet (Ceylon) Plc is going for a Rs. 246.3 million Rights Issue to fund its recent acquisition of 62% stake in Ceykor Aluminum Industries for Rs. 105 million, and infuse working capital for the venture.
The decision to tap shareholders to finance the acquisition was made by Parquet Board yesterday. Accordingly the Board resolved to recommend to shareholders a Rights Issue of three shares for every two held at Rs. 15 each. The company’s share traded yesterday at Rs. 31 whilst the announcement was made after the market was closed. Via the issuance of 16.42 million shares Parquet intends raising Rs. 246.3 million.
The current stated capital of the company is Rs. 121.9 million amounting to 10.95 million shares. This includes the conversion of Rs. 30.0 mn debt owed to Lanka Tiles Plc, to 3,000,000 ordinary shares in December 2009.
Lanka Tiles owns 48% stake in Parquet and Lanka Walltile owns 11.5% whilst LTL Managing Director Mahendra Jayasekera owns 5% stake as well.
In the first quarter of 2010/11 financial year, Parquet’s net sales were up 15.7% to Rs. 28 million and gross profit was Rs. 3.9 million, up 25% over a year earlier. Net profit was Rs. 0.8 million, as against a loss of Rs. 1.2 million in the first quarter of 2009/10. Whilst Parquet has begun to make profits, it remains saddled with Rs. 207 million of accumulated losses. Parquet has long term liabilities of Rs. 29.4 million, down from Rs. 66.5 million a year earlier whilst current liabitilies were Rs. 128 million, down from Rs. 138 million as at 30 June, 2009 but higher from Rs. 126 million as at 31 March, 2010.
During the quarter the timber related manufacture of the Company has been scaled down. New product lines in the manufacture of Tile Mortar and Tile Grout are now the Company’s main business activities.
In 2009/10, Parquet concentrated on the production of “Tile Grout” and “Tile Mortar”. The manufacture of timber related-products was limited to specific order requirements of overseas buyers and products manufactured for the local market with available stock of raw material. As a result, the export turnover declined by 85% from Rs.32 million to Rs.4.8 million and the net turnover of the Company dropped by 27% from Rs.122 million to Rs.88.7 million. The Company made a net loss of Rs.17.97 million (inclusive of a provision of Rs.6.25 million as compensation) during the year under review as compared to a net loss of Rs.18.18 million in the year 2008/2009.
Ceykor Aluminum Industries is a September 2009 Board of Investment approved venture between Sri Lanka and Korea with an investment of $ 11 million. It was set up to manufacture aluminium extrusions for the local market from its facility at Dompe. The venture was also set up with plans to export products to the Indian market.
Ceykor styles itself as having one of the biggest and well equipped aluminum extrusion plants in South Asia. It has two automated production lines of extrusions, fully innovated anodising lines, hot top billet casting line. It has the biggest powder coating line in Sri Lanka and has abilities with ultra modern developed systems for designing.
