Ceylon Guardian Group secures cash surplus of Rs. 2 bn

Capital gains through sale of long term holdings:

The Rubber Investment Trust Limited a subsidiary of the Ceylon Guardian Investment Trust PLC, sold its long standing shareholdings in the Malaysian oil palm companies to Goodhope Asia Holdings Limited, a subsidiary of Carson Cumberbatch PLC.

The trades which took place on the floor of the Colombo Stock Exchange were valued at approximately Rs. 731 mn and related to stakes of Indo Malay PLC, Good Hope PLC and Selinsing PLC, held by the Ceylon Guardian Investment Trust Group. The latter includes subsidiaries Ceylon Investment PLC (a company listed on the CSE) and Rubber Investment Trust Limited.

The divestment of the oil palm companies, coupled with the recent exits from Carsons’ associate company Union Assurance, as well as stakes of Ceylon Cold Stores and John Keells PLC from the long term portfolio, would see the Guardian Group realise profits estimated in excess of Rs. 1.5 bn this financial year.

The trades would also contribute to enhancing the Guardian portfolio’s liquidity position to almost Rs. 2 bn in cash surpluses, and thereby give the Investment Group flexibility in evaluating the options available to it to either re-invest in tradeable stocks or enhance direct returns to shareholders.

The Guardian Group, in addition to its extensive portfolio of general listed equity investments, also holds a part of the Carson Cumberbatch Group’s strategic investments within its portfolio.

These strategic investments have over a period of time accumulated significant value to the investment companies’ asset base and their shareholders. Thus, for the shareholders of Ceylon Guardian Investment Trust PLC and Ceylon Investments PLC, this sale would see the realisation of value, booking of profits and securing of liquidity on these long time holdings in the oil palm companies.

While realising gains to the Guardian Group, the divestment of these shares also enhanced the cash position of the portfolio, creating an opportunity for the investment companies to consider the best options available to them to utilise this cash in a manner beneficial to shareholders.

The Guardian Group availed itself of the opportunity to exit from these investments through a divestment to Goodhope Asia Holdings Limited, which recently acquired the majority stakes of these oil palm plantation companies from the parent company Carson Cumberbatch PLC.

The Directors of Ceylon Guardian Investment PLC are Israel Paulraj (Chairman), Chandima Gunawardena, Asoka de Z. Gunasekera, Chandana Tissera and Manilal Fernando.