Norwegian company sells stake in Ceylon Oxygen

Channa Kasturisinghe

BOURSE: The stock market turnover exceeded one billion rupees yesterday mainly due to a mega deal in Ceylon Oxygen Ltd, of which 4.7 million shares traded contributing about 87 percent of the days turnover.

Over 70 percent stake of Ceylon Oxygen held by Yara International ASA, a leading Norwegian chemical company was yesterday sold to Actis South Asia Fund in two blocks at Rs. 241 and Rs. 242 and the total value of the deal was Rs. 1.15 billion.

Although the buyer was a foreign party, according to market sources the deal had taken place through a local buyer which acted as a special purpose vehicle in this deal.

Sri Lankan Government sold the majority stake of Ceylon Oxygen Ltd's to Norsk Hydro ASA as a part of its privatization efforts. Yara International ASA is a subsidiary of Norsk Hydro ASA and the two companies demerged recently. Yara Industrial last June announced that it has entered into an agreement to sell its shareholding of 70.85% in Ceylon Oxygen Ltd. to Actis South Asia Fund, as a part of Yara's strategy to streamline operations.

Ceylon Oxygen Ltd. holds about, 80% market share in the Sri Lankan gas market. It produce cylinder gases which constitute about 60% of the company's sales revenues.

The company said recently in a statement that Europium, a subsidiary of Actis South Asia Fund 2 LP, has agreed to buy the shares each at 240.65 rupees.

"Yara intends to streamline operations and is selling off its interest in Ceylon Oxygen to focus more on its core fertilizer and chemicals business," Yara's Vice President, Per Kvarum said.

It also said that if the deal goes through, Actis will set up a new Sri Lankan subsidiary, and then make a mandatory offer for the balance shares.

Europium Ltd is a company incorporated in Mauritius and is a subsidiary of Actis South Asia Fund 2 LP.

Despite this mega deal the market closed at a negative note with both indices recording losses. The All Share Price Index closed at 2,320.27 points down by about 9 points and the Milanka Price Index lost 10 points to close at 2,899.31 points.

Although, Ceylon Oxygen share closed gaining Rs. 7.75 most of the counters recorded losses.