Browns buys 2 warehouses of Eastern Merchants for Rs. 645 m

Eastern Merchants PLC (EMER) has agreed to sell two of its warehouses to Brown Engineering and Construction Ltd., for Rs. 645 million. 

EMER said its Board resolved to sell warehousing complexes located at Gonawala Road – Sapugasakanda and at Udaya Mawatha – Sapugaskanda totalling 636.1 perches to Brown’s subsidiary. 

The two have signed a Sales Purchase Agreement with conditions that Brown pays Rs. 50 million as an advance and conclude the balance payment of Rs. 595 million on or before 28 February 2022.

EMER said the value of property is less than half of total value of company’s assets and the sale does not constitute a major transaction in terms of the Companies Act.

Post-announcement, EMER’s share price on Friday gained by 11% or 80 cents to close at Rs. 8.10.

Total assets at company level as of 30 September were Rs. 1.9 billion.

For the six months ended 30 September, revenue of EMER Group, which specialises in export of traditional and non-traditional commodities rose by 70% to Rs. 1.4 billion and gross profit was up 2% to Rs. 170.5 million. Higher administrative and distribution expenses saw the Group profit from operations decline to Rs. 32.6 million from Rs. 70.8 million. Pre-tax profit was down by 74% to Rs. 11.8 million.