The board of Directors of Eastern Merchants PLC resolved on the 10th of December to sell the Company’s warehousing complex located at No. 101 Gonawala Road Sapugaskanda and No. 20 Udaya Mawatha, Spaugaskanda (636.1 perches in extent) to Brown Engineering and Construction Pvt. Ltd., for a consideration of Rupees Six Hundred and Forty Five Million (LKR 645, 000,000). The Company intends to use the proceeds to facilitate its growth and expansion plans.
Eastern Merchants PLC acquired 100% shareholding of Microcells (Pvt) Ltd. (hereafter referred to as “Microcells”), for a total purchase consideration of LKR 575 Million. The acquisition was funded by a mix of equity and short term debt.
Founded in 1978, Microcells manufactures and exports technical rubber matting and sheeting products to a global client base. The products of Microcells has applications in multiple sectors, ranging from the agricultural to industrial sectors. A BOI approved company, Microcells employs a staff of over 150 in its factory and office complex situated in Piliyandala.
For Eastern Merchants PLC, the acquisition is timely and in line with its strategic plans to become a fully integrated rubber player. Given its deep experience with natural rubber, the well-placed sourcing networks and strong supply chain, Eastern Merchants PLC is certain of its ability to realize the synergistic value of this acquisition.
The Board of Directors of the Company believe that through this acquisition the Company will be able to reach new heights and fulfill its fullest potential while continuing to create shareholder value.
Eastern Merchants PLC incorporated a new subsidiary in Singapore named Eastern Merchants Commodities Pte. Ltd., for the purpose of further developing its trading operations. The registered offices of Eastern Merchants Commodities Pte. Ltd., will be situated at 20 Cecil Street, #05-03 Plus, Singapore 049705. The Board of Directors of this new subsidiary comprises four of the Executive Directors of Eastern Merchants PLC and Mr. H.M Wijeyekoon.
Eastern Merchants PLC gained shareholder approval for the sale of the land and buildings owned by the Company at No. 284 Vauxhall Street, Colombo 02 and No. 341 Union Place, Colombo 02, (being one block in extent 134 perches) for a sum of Rs. 1,040,000,000. In the most recent valuation dated 6th April 2014, this property was valued Rs. 939,000,000.
It is proposed that the funds raised on the sale are to be invested to diversify the business of the Company from its traditional commodity trading into new business ventures focusing on value-addition. The Company also proposes to utilize a part of the sales proceeds to settle the outstanding debts of the company, which is considerably low.
The Managing Director of Eastern Merchants PLC, Mr. Anil Karunaratne retired from his post as well as the Board of Directors of Eastern Merchants PLC and its subsidiaries Eamel Exports Ltd. and Spice Lane (Pvt) Ltd., with effect from 31st December 2014. Mr. Karunaratne was appointed the Managing Director in 2006, and was with the Company for some 40 years.
Mr. Channa de Silva (C. S. L. de Silva) has been appointed as the new Managing Director Of Eastern Merchants PLC and its subsidiaries, namely Eamel Exports Ltd. and Spice Lane (Pvt) Ltd. with effect from 01st January, 2015.
Eastern Merchants PLC incorporated a new subsidiary named Spice Lane (Pvt) Ltd., for the purpose of further developing the trade of spices conducted by the group. The registered offices of Spice Lane will be situated at 341 Union Place, Colombo 2 and the Board of Directors of this new subsidiary comprises six of the Executive Directors of Eastern Merchants PLC.
A range of spices including cinnamon, pepper, and cloves are currently cultivated and exported from Sri Lanka, and spice exports from the country have experienced strong double-digit growth over the last few years. In particular, the Company sees massive potential in Sri Lankan cinnamon or “true cinnamon” that is more or less exclusively native to Sri Lanka. Spice Lane was formed to explore these opportunities that we see in this sector.
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