case studies

TATA Steel exits from Lankan steel biz, E.B. Creasy acquires 100% stake

tata-logo E.B. Creasy and Company PLC has acquired a 100% stake in Lanka Special Steels Ltd from Tata Steel Ltd for Rs. 433 million. Lanka Special Steels Ltd. (LSSL) is engaged in the business of manufacturing and supplying hot dip galvanised steel wires with an installed capacity of 14,400 metric tons per annum and has an annual turnover of Rs. 1.4 billion for the current financial year.

TATA Steel LSSL commenced operations in Sri Lanka in November 2003. It was TATA Steel’s first overseas acquisition. The company is the sole manufacturer of GI wires in Sri Lanka and caters to the commercial galvanised wires market for end users like barbed wires, wire meshes and chain links. It uses state-of-the-art technology and high-speed wire drawing machines to manufacture high quality products. Lanka SSL is a market leader in the segments that it serves.

TATA Steel Global Wires (TSGW) business is amongst the largest steel wire manufacturers in the world (largest in India, Thailand and Sri Lanka), with six manufacturing facilities in India, Thailand and Sri Lanka. It has a combined annual manufacturing capacity of 670,000 MT and employs over 2,000 people. To bring about a greater focus to the steel wires business, TATA Steel has brought all its wire manufacturing under the scope of the Global Wires Business. The total revenue of TSGW was $ 496 million in 2012-13. TATA Steel today is among the top 10 steel producers in the world with an existing annual crude steel production capacity of around 30 million tons per annum. The Group has operations in 26 countries, a commercial presence in over 50 countries, and employee strength of over 81,000. With a focus on continuous improvement, the company meets diverse customer requirements across multiple segments worldwide. It is the first integrated steel plant in Asia.


Ceylon Tapes acquired by LCEY

A 100% stake in Ceylon Tapes (Pvt) Ltd has been acquired by Lankem Ceylon PLC for Rs. 130 Million. On 4th April 2014, in a filing to the Colombo Stock Exchange, Lankem Ceylon PLC (LCEY) said that it purchased 820,000 ordinary shares and 160,000 preference shares that represented 100% stake of the company.

Ceylon Tapes primarily engages in the business of manufacturing various adhesive tapes and associated products such a clear tapes, printed tapes, masking tapes, double sided tapes, warning tapes, kraft paper, wrapping film, etc. These adhesive products are primarily used for purposes of industrial packing, apparel sector and FMCG related industries. Plans are afoot to manufacture Paper Tubes in the short term with a view to embarking on Composite Can Manufacturing. Paper Tubes are to be used for internal usage as well as for the apparel sector. The company, founded by Mr. A.K. Ratnarajah to manufacture and supply products for purposes of industrial packing, was established 23 years ago.


Market tops a billion, indices edge up

C.W. Mackie's Danish owners sell control to local party

January, 2010 - The sale of the controlling interest of C.W. Mackie & Co. PLC by its Danish owners to a local buyer boosted turnover on the Colombo bourse to Rs.1.7 billion, up from the previous day’s Rs.724.4 million, with both indices too edging up marginally – the All Share by 12.02 points (0.34%) and the Milanka by 3.93 points (0.10%) with 74 advancers slightly ahead of 68 decliners.

Lankem Group acquired the controlling shareholding of C.W. Mackie PLC, a listed food distribution and trading firm with its majority Danish shareholder Aarhus United A/S / AarhusKarlshamn ( exiting in a much anticipated stock market acquisition. Lankem Ceylon PLC said it had bought 36.71 percent of CW Mackie (13.2 million shares) and a group subsidiary had bought 19.85 percent (19.85 million shares).

C.W. Mackie has a strong island-wide distribution network for FMCG products such as Sunquick and Scan Products backed by a state of the art bottling plant for bottling of renowned Sunquick range of cordials under franchise and Scan drinking water. The company distributes Sunquick branded concentrated juices which is believed to be one of the most popular non-carbonated beverages in Sri Lanka and snacks such as Jumbo branded peanuts. Also the company is one of the largest exporters of Natural Rubber and Desiccated Coconut in Sri Lanka. The Company exports approximately 3,500MT of Crepe Rubber, 4,000MT of Tech.Sp.Rubber and 3,000MT of Desiccated Coconuts. The Company also imports and distributes approx 15,000MT of Sugar as well as import and resale of Industrial and Light Engineering products and agent for Hempel marine paint and protective coatings.

C.W. Mackie PLC holds a long term lease of prime water-front property in the heart of Colombo that is ideal for a city hotel or mixed development.


Private Equity Deal

Diversified Group buys 10% strategic stake in Industrial & Engineering Services Company

InCapita played a significant role in this transaction within the Manufacturing & Industrial Sector by structuring a deal for a Private Equity Investor to buy a 10% strategic shareholding in the Target Company. The Target Company, with primary focus on engineering services and representing a range of prestigious foreign principals, has previously gained remarkable success in the transport and railway sector and has subsequently branched off into infrastructure and engineering sciences covering aspects such as Telecommunications, Water Supply and Filtration Projects, Petro-chemical Engineering, Power Generation, Plantation Engineering, Civil Engineering and Marine. The telecommunications sector proves to be the most lucrative as the company currently derives a substantial portion of their revenue from telephone cabling and related services.

The private equity investor was a diversified group in Sri Lanka looking at creating business synergies through strategic acquisitions and private equity investments.