Al-Futtaim acquires AMW shares

Hiran H. SENEWIRATNE

Al- Futtaim Engineering, the Dubai based automotive retail, electronics and financial services conglomerate acquired a majority shareholding of Associated Motorways PLC. With this acquision AMW office in Colombo will be the head quarters for the SAARC region, its sources said.

“The company needs to infuse more capital to accelerate the growth therefore Al-Futtaim will invest heavily on medium to long term perspectives of the company,” Chairman, AMW, Ajitha de Zoysa told a press conference announcing the deal.

The company has notified the Colombo Stock Exchange (CSE) on this Rs 7 billion deal, which is the 30th largest business entity in the country.

“In line with the CSE’s takeover and mergers it will be an unconditional offer following the official confirmation to acceptances of the above 50 per cent threshold. Among many synergies between AMW and Al-Futtaim group the company will evaluate the strength of the company,” he said.

Al-Futtaim bought 71 per cent of the company for Rs 7 billion purchasing Rs. 174.50 for a share, he said.

The company being family owned for more than 59 years, primarily manufactured retread tyres to the largest public transport company known as South Western Bus Company, which was established by Sir Cyril De Zoysa.

“With this new strategic partnership, the company will be a major development force in the Sri Lanka’s economic development,” Zoysa said. Therefore after the present Chairman Ajitha de Zoysa’s retirement, Deputy Chairman/Managing Director Tilak de Zoysa will be appointed as the Chairman of the company.

“We have to think out of the box with the current economic changes in the world and this is an extremely friendly takeover. Therefore, they will mainly focus not only on the local market but also overseas markets,” he said.

“AMW is on the threshold of making several large investments including an automotive assembly project and the proposed real estate development refereed to earlier. This transformation will convert AMW into a multi-national corporation in the future,” he added.

Zoysa said the recent real estate development plan with John Keells and James Finlays, AMW would further strengthen it. They will also look to other sectors like plantation retail business and many more.

Al-Futtaim- Senior General Manager- Business Development Automotive Division Bob Farrow said after carrying out a comprehensive due diligence, the group CEO Omar Al-Futtaim will visit Lanka to do a comprehensive study on the company’s potential.

Al-Futtaim has decided to take over the majority control of the company as an initial step. “It will bring in new management expertise, create employment opportunities and secure the future of the business and the company’s employees both locally and internationally,” he said. Farrow said they would further invest in a car assembling plant and a rubber factory.

Al-Futtaim initially operates as a trading enterprise, which is established as an integrated commercial, industrial and a service organisation and one of the leading business houses in the Gulf region.