JKH in strategic move to own 20% shares of AMW

Shirajiv Sirimane

MERGER: John Keells Holdings Ltd (JKH) has made an offer to own 20 per cent shares of Associated Motorways limited (AMW).

The shareholders of AMW are to approve to an allotment to John Keells Holdings Limited of 1,032,231 new shares of Rs. 10 each at Rs. 380 per share (at a premium of Rs. 370 per share) constituting 11.12%.

In addition Associated Electrical Corporation Limited (the major shareholder of AMW) who holds 70.1% of the shares have agreed with John Keells Holdings Limited to accept the Partial Offer, and have given an undertaking to give up from the holdings of AEC that number of shares necessary to make up the 10% of the Partial Offer, which constitute less than 10% (being 8.88% of the issued and paid up share capital post the placement.

This is the first time that a limited partial offer of this nature will take place in Sri Lanka.

Chairman AMW, Ajitha de Zoysa said with this offer they would be moving out from their present premises at Union Place and build a purpose built motor division and a modern showroom at D. S. Senanayake Mawatha. The service station too would be up graded.

"We are expecting around Rs. 400 million from the JKH offer and hope to utilise it towards our expansion plans at D. S. Senanayake Mawatha," he said.

John Keells has offered to purchase from the shareholders of AMW 10 per centum of the issued and paid shares of AMW at a price of Rs. 380 per share.

AMW shares were traded on June 18 at Rs. 360 and the following day at Rs. 380.

The number of such shares constituting the 10 percent is equivalent to 824, 237 ordinary shares of Rs. 10 each.

He said that one reason for this is that they wanted to show the world that investors are still confident to invest in Sri Lanka. Chairman JKH, Susantha Ratnayake said they were very keen of this since AMW is in a prime location and it was also situated in close proximity to JKH.

"We are looking at developing this 4.5 acre AMW land to a up market high end residential property," he said.

They would be floating a separate company to develop this property.

Ratnayake said that the investment climate is very friendly in Sri Lanka and there is a great demand for up market residencies.

"The Emperor residencies was a great success and we have received bookings for 175 apartments," he said.

Ratnayake is also expected to be in the AMW Board from August.