Sri Lanka’s a Laugfs Gas PLC announced a strategic restructuring to consolidate dominance in energy operations and create opportunities for investors to invest in individual businesses and foster concentrated growth opportunities, a senior official said Tuesday.
“Once the segregation is completed by 31st March as expected, all different entities will be in a position to operate as independent entities in the new financial year,” W K H Wegapitiya, chairman of Laugfs Gas told a press conference in Colombo.
“Through the restructuring process we expect to attract foreign strategic investors with specific knowledge in the energy segment.”
Ultimately, this move will enable each business sector to reach their full potential and create enhanced value for our shareholders and we are confident that this move will attract favourable interest of both local and foreign investors, he added.
The company the only private sector player in the LPG market in Sri Lanka said the restructuring of its non-core businesses will accordingly consolidate its LPG downstream activities in the island and Bangladesh, LPG sourcing, LPG maritime logistics and the Terminal operations under one pillar.
LAUGFS Power Ltd, LAUGFS Leisure Ltd and LAUGFS Eco Sri Ltd will be individually listed on the Colombo Stock Exchange (CSE), subject to necessary regulatory approvals from the SEC and the CSE, consequently enabling the management of these three companies to concentrate further on developing and expanding their respective businesses by leveraging on existing market opportunities.
On the 28th December 2017, the Board of Directors of LGL approved the restructuring initiative to be facilitated via a Scheme of Arrangement and initiated the process of obtaining the necessary regulatory, legal and shareholder approvals.
The process is likely to create an avenue for greater inflow of FDI, for each business segment by encouraging regional investors that look to invest in individual and focused business ventures as opposed to diversified businesses, especially unrelated diversification.
The subsidiaries, LAUGFS Power Ltd, LAUGFS Leisure Ltd and LAUGFS Eco Sri Ltd witnessed a restructuring of their shares via a share split to mirror their shareholding with LGL’s shareholding structure.
As a part of the segregation process, all the shareholders of LGL will be entitled to an identical shareholding in the individual companies, thereby ensuring that they do not lose value as a result of this process.
Capital Alliance Partners Limited, a leading investment bank assisted the restructuring process.
As a prelude to the proposed restructure, LAUGFS Gas PLC (LGL) held an investor forum for a cross-section of investors and a media briefing to communicate the strategic objectives that shaped the decision to restructure as well as the larger vision and opportunities that this process would provide to all stakeholders with vested interest in individual companies as well as LAUGFS Gas PLC as a whole.