Sri Lankan operation valued at US$ 200m, four parties show interest :

Singer Asia for sale for US$ 350m

Ravi LADDUWAHETTY

Singer Asia, which includes the Sri Lankan operation and those of Bangladesh, India, Thailand, Malaysia and Pakistan is up for sale for a value in the region of US$ 350 million.

The rationale for the sale of Singer Asia was that the US and Hong Kong based investors who bought it almost at a give away price in September 2000 at the time that the Asian operation was facing bankruptcy, were now wanting to exit the operation making a killing, top international market sources told the Daily News Business yesterday. They also said the proposed sale was for the Asian operation in its entirety and not based on a piecemeal operation.

Despite the value of the sale being rated at US$ 350 million, it is the Sri Lankan and Bangladesh operation which is valuable in the equation where the Sri Lankan operation is worth in the region of US$ 180 million in terms of asset value and growth potential and a another US$ 20 million as goodwill along with the Bangladesh operation which is valued at a further US$ 120 million. But the rest of the operations in the other countries are not worth much, they pointed out. They also explained that the Indian operation was almost at no value due to stiff competition from other major brands there while the Malaysian and Thai and Pakistani operations were very small to talk about.

They also said investors would be mindful of the fact that Singer Sri Lanka, despite the low earnings two years ago was expected to earn around Rs. 1.2 billion post tax profits for the year ended December 31, 2012 which would justify the selling price of the local retail business. “It would be positive in the event of the Asian operation being purchased by a Sri Lankan party as US$ 350 million was not big for a Sri Lankan corporate and or with a consortium of investors in this regard,” a top source said.

Market was rife with speculation yesterday that four parties had shown interest, which includes a top rung diversified conglomerate, a motoring giant with Indian ownership and two others.

The sources were tightlipped as to whether the local corporates and the foreign ones were to go single handedly or in a partnership.

It is also relevant that the sale would eventually lead to criteria of remittances of foreign exchange and the approvals of the Exchange Controller, be the buyer/buyers being a Sri Lankan party or foreigner.

When contacted by the Daily News Business for comments, Singer Sri Lanka Chairman Hemaka Amarasuriya said it was unethical for him to comment as Sri Lanka Chairman and Singer Group Corporate Vice President.