By Cheranka Mendis
Owners of Access Engineering yesterday in a value adding exemplary gesture gifted a 15% stake of the company to its employees.
The ceremony to announce and award the shares at Waters Edge yesterday was emotionally charged with even Access Group Chairman Sumal Perera breaking down in tears during his speech.
Perera, announcing the founder shareholder’s decision to gift 15% of their shareholding of the company to the management and staff of Access Engineering, showed his sentimental side yesterday and had to pause a few times, wipe the tears rolling down his cheek and then continue speaking during an event held at Waters Edge.
“This was no accident or overnight decision,” Perera said referring the Company’s value adding move to employees. “The vision to broad base ownership was always very much in the minds and hearts of the founder shareholders.”
The gift of shares amounting to 15% of shareholding represents a total of Rs. 3 billion at Rs. 25 per share. Over 1,000 employees of Access Engineering and 34 employees in the Access Group were the recipients of the offer.
The gifting was hot on the heels of Access Engineering raising Rs. 4.5 billion via a private placement of 180 million ordinary shares at Rs. 25 each last week. It hopes to list on the Colombo Stock Exchange later this year.
Reminding the employees that the benefits of the shares disbursed came with a tag of greater responsibility towards both “the company and investors well versed with commercial activities in the country, who put in their hard-earned money into the company”.
Perera asserted that the share issue was a gift that made business commonsense. “It is a gift as it was not something we promised to give you or anything that was entitled to an employee. This is not a charity act from the original shareholders as this is given with a view of motivating and encouraging the employees and increasing their productivity and performance levels.”
On a personal level, Perera stated that for him the gift was valued much more than the existing value tag. “I am personally not happy to say this is a gift worth Rs. 3 billion. I would like to think this is a gift worth at least Rs. 9 billion. If not disbursed, the shares would have been given to our families.”
The long term goal is to triple the share worth to Rs. 9 billion, he said.
“I think that you would be able to pay back three times of what was given within five years. If the profit value increases by 20%, we would be able to recover what is being given now,” he said. “In that sense this not a gift nor charity act; it makes perfect business sense.”
The gift of shares, which adds pressure on the founder shareholders, will however move the company forward in the correct direction. “The company is now on track. It has new capital, incentives for employees and better governance.”
The Chairman further added that from 1 July, the company would open its doors to three outside independent directors: Vice Chancellor of University of Moratuwa Prof. Malik Ranasinghe, Deputy Chairman of Union Bank of Colombo Alex Lovell and qualified accountant Niroshan Gunarathne, who will implement better governance within the company.
Joint Managing Directors Christopher Joshua and Ranjan Gomez, along with Chairman Perera, are the founder shareholders of the company.
The company’s next step is to list itself in the Colombo Stock Exchange by end this year or early 2012. In evaluating the company’s prospects, Access believes that the size and magnitude of the company will enable it to be among the first 25 companies in the CSE around the time of listing, and moving up over time.
Joshua, speaking on the progress the company has made, said it started as a trading company with a vision to be in the forefront in business similar to Japanese trading companies at the time – Itochu, Mitsubishi and Marubeni – and moved into other areas of civil construction and soon developed into a multi discipline construction. Access Engineering was incorporated in 2001.
He noted that the company was today the third largest construction company in Sri Lanka on turnover, second highest in terms of net profit and number one in terms of profit to turnover ratio.
“On ICRAD C1 grading we are the number one contractor in Sri Lanka. On service offered and on value engineering and knowledge integration, we are the best not only in the industry but in the entire nation,” Joshua asserted.
The gift of share was awarded to the employees after categorising 50 managers and assistant managers into 11 categories, 235 executive staff into 14 categories, 94 clerical staff into four categories and over 727 support staff into three categories.
“The gift of shares will contribute to make over 250 of you millionaires and multimillionaires,” he acknowledged. “As shareholders, it is the responsibility of everyone to work towards becoming not only the top construction company in Sri Lanka, which we have almost fulfilled, but to be among the all time top 10 companies of the country.”
Moving forward as a public entity, the company has tremendous potential for diversification and growth backed by a full order book to contribute towards substantial growth in the coming years, Joshua added.