Foreigners vie for bulk of Ceylinco Insurance shares

Ravi LADDUWAHETTY

Foreigners have accounted for the bulk of the Rs. 1.5 billion Ceylinco Insurance non-voting share issue, which opened last Friday.

The issue was subscribed by around half yesterday by 3 pm accounting for around 4 million shares, Ceylinco Insurance Finance Director Nihal Pieris told Daily News Business yesterday.

He said there was a Malaysian party which was wanting to acquire the entire issue but the company declined the offer on the grounds that the moral of the issue was to broad-base the ownership of the company.

The company will be keeping the issue open till July 9 which is 14 market days from the date of the opening during which the company has received 288 applications accounting for 194.964 shares worth Rs. 34.1 million.

Peiris said that the financial structure of the company was sound with the growth of the total assets by 17.2% in the last financial year with the investments standing at Rs. 17.6 billion which is a growth by 11% over the previous year.

Market capitalisation has also grown by 10.5% to Rs. 3.7 billion while the market value of the share was also as high as Rs. 220.

Ceylinco Insurance has also emerged as the first Insurance Company in Sri Lanka to top the Rs. 1 billion profit mark.

The gross consolidated premium income of the company for the past financial year was Rs. 17.2 billion.

It has a general insurance income at Rs. 1.035 billion while the Life Insurance income is Rs. 800 million. The motor insurance portfolio is Rs. 6.2 billion while non- motor insurance portfolio is Rs. 4.1 billion.

The brand value of the company has been placed at Rs. 6.5 billion and the consolidated Enterprise Value of the company has been valued at Rs. 25 billion.

The reason for the issue is for the overseas expansion, investments into the local health care sector and also for the Insurance Board of Sri Lanka regulations to increase company’s the capital and also to broad base the ownership company, Ceylinco Insurance Chief Executive Director Ajith Gunawardena told Daily News Business.

“We will also use this capital to further expand our branch network which currently stands at 400,” he said.

He said that no sooner the company gets the formal approval from the Colombo Stock Exchange the shares will be on offer at Rs. 175 which makes Ceylinco Insurance on of the very few corporate to issues shares at this price range, he said.