ECONOMYNEXT – Sri Lanka’s JAT Holdings, which claims a 50 percent market share in wood coatings and has export presence including in Bangladesh, is seeking 1.5 billion rupees in an initial public offering, while an existing shareholder is selling out for 731 million rupees.
The share offer by JAT Holdings which sells ‘Sayerlack’ branded coatings by Sherwin Williams will open on July 20 on the Colombo Stock Exchange.
JAT Holdings is offering 55.8 million shares to raise 1,506 million rupees and Emerald Fund and existing shareholder will sell another 27.09 million shares to exit with 731 million rupees.
After the IPO the firm will have 510.4 million shares in issue. Last year the firm had bought back 2.6 million stock from Jehan Amaratunga, a shareholder for 21.41 rupees a share.
In the year to March 31 the group posted profits of 598 million rupees on revenues of 5.3 billion rupees.
Group revenues fell from 6.5 billion rupees in 2019 to 6.2 billion in 2020 amid a Coronavirus pandemic.
Profits fell from 880 million in 2019 to 707 million in 2020.
Local sales rose from 3.5 billion rupees in the year to March 2020, 4.5 billion rupees in 2021, but export sales fell from 1.74 billion rupees for 618 million rupees.
Revenues from Bangladesh, the top export destination fell from 1.6 billion rupees in 2020 to 540 million rupees in 2021.
Bangladesh has a good central bank which has kept the exchange rate stable for over a decade and has avoided currency crises and monetary instability.
Revenues from India rose to 99 million rupees in 2021 from 61 million rupees.
The firm has a unit in UAE to do entrepot trade to other countries.
The firm is also developing an export market in Africa.
“As a market development strategy, JAT has rapidly expanded its presence in the African region during 2020..,” the IPO document said.
“JAT represents Sherwin-Williams’ interest in c. 75% of countries in Africa having obtained the exclusive right to distribute Sayerlack wood coatings in the said countries.
“The African region is a virgin market for JAT’s wood coating products and the Company has already earmarked East Africa to set up a wood coating manufacturing facility as per its IPO objectives and expand its footprint in the region.” (Colombo/July05/2021)