Renuka Holdings buys control of Carson’s Guardian Capital for Rs. 636 m

Renuka Holdings Group has control of 75.6% of Guardian Capital Partners PLC (WAPO) for Rs. 636 million in a strategic investment and diversification. 

In a filing to the CSE, Renuka Holdings PLC said subsidiary Shaw Walla and Hedges Ltd. acquired 8.7 million shares (or 33.67%) in Guardian Capital for Rs. 283.24 million or Rs. 32.30 per share and Shall Wallace Investments PLC bought 7.74 million shares (29.97%) for Rs. 252.13 million. 

Separately Renuka Holdings related parties S.V. Rajiyah and J.J.B. Aloysius bought 3.13 million shares or 12% for Rs. 101 million.

Yesterday WAPO closed the day at Rs. 34.70 up by 7.4% or Rs. 2.40 with 21.87 million shares changing hands via 372 trades for Rs. 707 million.

The public float of Guardia Capital is 13% held by 2,070 shareholders. Carson Cumberbatch PLC’s Ceylon Guardian Investment Trust as at 30 June held 84% stake or 21.7 million shares and Carson Cumberbatch held 2.25%.

Guardian Capital had assets worth Rs. 793 million as at 30 June and revenue reserves of Rs. 276 million. Net assets per share was Rs. 30.56, up from Rs. 30.38 as on 31 March.

In its interim accounts for 1Q of FY22, Guardian Capital said the company together with its parent Ceylon Guardian Investment Trust PLC entered into a Share Sales and Purchase Agreement (SSPA) with Gazelle Asset Management Ltd. (GAZELLE), a Company incorporated in Singapore, for the sale of 21,692,800 ordinary shares being 83.97% stake held by CGIT of the company to GAZELLE. 

The purchase consideration per share will be determined based on the net asset value of the company as at a date mutually agreed by the parties prior to the transaction plus a premium of Rs. 40 million. 

NDB Investment Bank is the exclusive Financial Advisors to the Transaction. Shareholder approval was duly obtained at an Extraordinary General Meeting held on 7 January for substantially altering the nature of the business carried on by the Company under section 185 (2) (d) of the Companies Act No. 07 of 2007 and Article 87 (1)(vi) of the Articles of Association of the company which was one of the conditions precedents. 

“The transaction is yet to be completed as at the date of signing these Financial Statements and has taken a longer period than anticipated at the time of signing the Share Sale and Purchase Agreement,” Guardian Capital said.

However, this deal was terminated in early October.