Brokers predict run on Hemas shares
Stockbrokers were predicting a run on the Hemas share issue opening this week and said that the IPO and offer of sale of 12 million shares at a fifty rupees price is likely to be snapped up on the September 18 opening day itself.
"We hope it will be like that," said Mr. Husein Esufally, the company’s CEO. "But we must wait and see."
There was no word yesterday on the number of applications already in with the Secretaries (SSP Secretarial Services) saying that those handling the issue were not available.
Esufally said they themselves have no hand in receiving applications. But there "seemed to be interest" both locally and from some of their friends abroad. Also, applications tend to come in at the last moment.
Asked whether the company would quickly refund unalloted share application money to applicants not getting their full requested allotments, Esufally said that refunds would be made as quickly as possible.
Asked what the basis of allotment would be, he said that they would have to take a decision with the advice of their registrars once the issue closes. "We have not decided on a basis of allotment yet but it will be as equitable as possible," he promised.
Of the 12 million shares on offer, 8 million are new shares while the balance 4 million are existing shares that are being disposed of by the present owners comprising the Esufally family and companies owned by them.
Four companies AZ Holdings (Pvt) Limited (22.175%), Blueberry Investments (21.179%), Amagroup (Pvt) Limited (21.179%) and Saraz Investments (Pvt) Limited (21.176%) currently own Hemas equity. The family owners are Messrs. Abbas, Imtiaz, Murtaza and Husein Esufally each owning 3.571% and Mr. Nuruddin Esufally with 0.007%.
These holdings would go down after the public issue as follows: AZ Holdings (Pvt) Limited (17.724%), Blueberry Investments (17.724%), Amagroup (Pvt) Limited (17.724%) and Saraz Investments (Pvt) Limited (17.723%) the prospectus reveals. The family holdings go down to 3.205% each with Mr. Nuruddin Esufally continuing to hold all his 4,667 shares.
600,000 shares of those offered are being allotted to employees of the group on a preferential basis. This is similar to what was done by John Keells when the group was restructured under a single holding company, John Keells Holdings (JKH).
Hemas (like JKH) has also established an Employees Share Option Plan by a resolution adopted in August whereby its senior management and employees are entitled to purchase up to 3.12 million ordinary shares of the company between April 1, 2004 and March 31, 2008.
Existing shareholders benefited from a bonus issue of three new shares for every four held in August.
Share allocations will be at the discretion of the board with allocations to senior management based on a performance criteria. The price at which the options are granted would be the weighted average market price of the share during 20 market days immediately preceding the date of the grant of the option.
In the case of JKH, several group companies were already quoted while Hemas companies are all unquoted although their leisure sector companies hold controlling stakes in the quoted hotel-owning Serendib group.
Hemas Holdings Limited will control 20 active subsidiaries and 3 active associates engaged in healthcare, personal care, transportation, leisure land strategic investments and will be the newest conglomerate to be listed by the Colombo Stock Exchange.
In the year ended March 31, 2003, group revenues hit Rs. 5.3 billion while the post-tax profit was Rs. 401 million, up from Rs. 204 million a year earlier and Rs. 208 mn. in 2001.
Directors compensation in 2002/2003 was Rs. 12 million and is estimated to be Rs. 23 million in 2003/2004.
Founded in 1988 by Sheikh Hasanally Esufally, MBE, the Hemas name derives from Hasanally Esufally Mother And Son.
The group is the largest private sector distributor of pharmaceuticals with a 14% market share and staff over 150 medical representatives, one of the largest teams in the country. Two of the top 15 drugs sold in Sri Lanka come from the group which is now also into pharmaceutical manufacture with its own brands collectively ranked No. 10 in terms of market share.
Hemas recently set up its own representative office in Chennai.
One of the biggest group projects in the pipeline is a 200 MW power project in Puttalam District costing approximately Rs. 6.2 billion which is being undertaken on a 50:50 basis by a new company, Heladhanavi Limited - a partnership between Hemas and Lakdhanavi.
The sponsors will put up the equity component of an estimated Rs. 1.2 billion while the debt component of Rs. 4.6 bill be raised from the banking sector.
The directors of the Hemas group are: Messrs. Husein Esufally, Mary Serena Fonseka, Abbas Esufally, Imtiaz Esufally, D. Bhatnagar, Murtaza Esufally, Lalith de Mel, Simon Scarff and Maitri Wickremesinghe.
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