ECONOMYNEXT - Sri Lanka's diversified Laugfs Gas Plc group said said a splitting non-core units will allow specialized investors to buy into the core liquefied petroleum gas (LPG) business as well as spun-off units like hotels and power generation.
Existing shareholders of Laugfs Gas Plc will get voting and non-voting shares of Laugfs Leisure Plc, Laugfs Power Plc and Laugfs Eco Sri, an auto emission teste, in the same proportion as shares held in the parent.
The units will be then listed on the Colombo Stock Exchange.
The diversified business had stopped specialist energy investors and regional funds buying into LGL, the firm said in a stock exchange filing.
"..[A] segregation will make the company a pure play energy business.." the firm said.
The hotels and power generation as well as the emission testing business will be able to buy into the units and provide technical knowledge through strategic partnerships, the firm said.
Many companies put billions of rupees into hotels after a 30-year war ended in 2009, generating a tourism boom and high prices, but since then the market has seen competition, creating an East Asia style with lean start-ups drawing visitors through booking engines, bringing prices down.
The parent will retain its LPG gas distribution in Sri Lanka and Bangladesh and terminal and gas shipping business.
Under Sri Lanka's company law, the firm has petitioned the High Court of the Western Province which has given the nod for a special general meeting of shareholders to approve the separation of businesses in mid-March. The next court date is March 23, 2018. (Colombo/Jan12/2018 - Update II)