Free Lanka goes for public offering

To raise Rs 1.5 b for hydro power, boutique hotels:

Harshini Perera

Free Lanka Capital Holdings Limited will go for an Initial Public Offer (IPO) to sell 300 million shares.

The issue is expected to raise capital on new hydro power projects, developing two boutique style hotels and to initiate a commercial property development project in Colombo. Free Lanka Capital Holdings Limited hopes to raise Rs 1.5 billion for these new expansion plans and diversification into the leisure sector.

Company officials at the IPO announcement yesterday. Picture by Samantha Weerasiri.

The capital raised from the IPO will be allocated on three lines of priorities. The new hydro power projects will utilize Rs 600 million of the funds raised. The second priority will be to develop two boutique hotels which will be an investment of Rs 250 million.

The third project will be a commercial property development project which will take an allocation of Rs 600 million. The commercial property development will provide rentable space in Colombo. The funds will be utilized from April this year.

The issue will be open on March 17 and will be close on April 5. A share will be issued at Rs 5 and will be listed in the Colombo Stock Exchange Diri Savi Board.

"The company has a strong grip in the plantation sector in which it owns 13,000 acres of rubber plantation and 19,000 acres of tea estates.

The company is looking at new sectors such as boutique hotels to cater to the increasing demand of foreign as well as local tourists," Free Lanka Capital Properties Director Rimeo Saldin said.

Two boutique hotels in Giragama Kandy and Ayr in Padukka will be set up.

"We have a workforce of 18,000 and we have been in the process of replanting rubber and tea. Our annual re-plantation of rubber is nearly 45 percent while 3 percent of tea plants are being replanted each year."

"We need to upgrade our estates and factories and we are concentrating on making value addition to Rubber as well as tea production. We have diversified to Green tea such as Melfort Green Tea. The company will upgrade the production of tea from Maturata plantation," Saldin said.