Dankotuwa Porcelain revives

With new capital infusion:

Channa Bandara Wijekoon

The Board of Directors of Dankotuwa Porcelain PLC announced to Colombo Stock Exchange last Thursday that the company entered into an agreement with two local investors.

Environmental Resources Investments PLC (ERI) and Ceylon Leather Products PLC (CLP). The consortium has agreed to invest a sum of Rs 433 million in the company through a private placement of 48,163,828 ordinary shares at Rs nine per share. The consortium will thus hold 66.67 percent of the issued ordinary shares, after the share issue.

ERI will be issued 42,163,000 ordinary shares (58.36 percent of the issued ordinary shares of the company after the issue) and CLP will be issued 6,000,828 ordinary shares (8.31 percent of the issued ordinary shares, after the issue). “We will sign a collective agreement soon with the investors, when the money starts pumping in, Dankotuwa Porcelain Chairman Sunil G. Wijesinha said. The unions are corporating and the Japanese investor too will continue to pump finances,” he said.

Asked by Daily News Business as to whether the company will introduce a Voluntary Retirement Scheme (VRS) to downsize workforce, he said the new investors wish to continue with the total existing workforce towards restructuring the company.

The investments will be utilized to restructure and expand operations of the company, with the emphasis made on purchasing state-of-the-art machinery, Dankotuwa Porcelain Corporate Affairs Manager Giyanie Fernando said.

The present liquidity status of the company as at March 31, 2010 is Rs. 246,169,771 represented by 24,081,914 fully paid ordinary shares, a communique said. The present debt position of Dankotuwa Porcelain is around Rs 430 million.