Watawala to sell marketing subsidiary for Rs. 742 m

Watawala Plantations (WATA) said yesterday its Board of Directors has proposed to dispose of the entirety of the investment in Watawala Marketing Ltd., at a consideration of Rs.742 m (subject to approval).

The investment by WATA in Watawala Marketing is reported at a carrying value of Rs. 355 m in the unaudited financial statements of 31 December 2011 (represented by 35.5 m ordinary shares).

Watawala Marketing Ltd. (WML) was established on 1 April 2010 as a 100% owned subsidiary as part of revamping Watawala’s overall marketing.

It primarily handles sale of FMCGs including Watawala’s strongest brand Zesta tea in addition to exports.

In the 2010/11 financial year, Watawala Marketing made a net profit of Rs. 232 million and a gross profit of Rs. 517 million. Turnover was Rs. 1.5 billion, up by 6.5% over the previous year.