Ceylon Oxygen Ltd. (COL), the once British-owned company acquired by the government under the Business Acquisition Act in the 1970s, and then `peoplised' during the Premadasa regime will be de-listed from the Colombo Stock Exchange if its present controlling shareholder, Specialist Gasses (Private) Ltd. (SGL) now holding 70.85% of the company increases its shareholding to not less than 75% by a mandatory offer for minority share that is now open.

The de-listing plan has been disclosed by the offer document SGL has sent out to minority shareholders of COL.

``In the event of the offeror (SGL) acquiring not less than 75% of the issued capital of COL, it intends making an application to the CSE top de-list the shares,'' the offer document has stated.

``Arrangements in accordance with the rules stipulated by the SEC will be made by the offeror in due course.''

Analysts expect that the Rs. 242 per share offer price will comfortably attain the 75% as many investors bought into COL at around Rs. 225 intending to take a profit on the widely anticipated mandatory offer price of Rs. 242.

The Offer Document from Specialist Gasses (Pvt) Limited (SGL) (previously known as Hammerkop (Pvt) Limited) has now gone out to shareholders of COL under the provisions of the Securities and Exchange Commission's (SEC) mandatory offer provision under its Takeovers and Mergers Code.

SGL is a fully owned subsidiary of Europium Limited incorporated in Mauritius which in turn is a 98.85% subsidiary of Actis South Asia Fund 2 LP. Its two member board of directors comprise Messrs. Steven Mark Enderby (Chairman) Asanka Haren Edirimuni Rodrigo.

Enderby is a well known figure in Colombo business circles having sat on the boards of several blue chip companies.

The company has a Pedris Road, Colombo-3, address.

The offer document says that Actis is majority funded by the CDC Group plc of the UK which is affiliated to the British Government and has in the past managed and invested funds in private sector companies/projects through a number of subsidiary companies and partnerships.

The mandatory offer was triggered following SGL acquiring nearly 4.8 million Ceylon Oxygen shares from Yara International ASA of Norway at an approximate cost of USD 11.3 million..

SGL paid Yara prices of Rs.241.75 and Rs.242 per share to acquire its total holding of Ceylon Oxygen and all minority shareholders have now been offered the Rs.242 price for their holdings.

The Registrars to the offer have stated that assuming full acceptance of the offer, the total cash payable would be Rs.476.2 million which has been committed by Actis South Asia. The Commercial Bank of Ceylon has confirmed that there were sufficient funds for SGL to cover this commitment.

The CDC group plc was founded in 1948 as the UK Government's instrument for investing in the private sector in developing economies land stimulating economic growth in those economies.

``The scarcity of long term risk capital, particularly equity capital, is one of the factors which constrained the privatre sector growth in the developing world,'' the offer document has noted.

CDC which has an asset base of US$ 2.8 billion has through its main investment manager, Actis Capital LLP, invested over US$ 150 million in Sri Lanka since 1993 in key businesses including the National Development Bank, South Asia Gateway Terminals (in which the JKH group is a partner), Asia Power and Ace Power aligned to Aitken Spence.

SGL was incorporated here in July 2005 to be used solely for the purpose of acquiring Ceylon Oxygen.

Actis through its India Fund had made several major investments in India including Swaraj Mazda (manufacturers and retailers of light vehicles), Avtec Limited (engines and transmissions) Sandhar Technologies Limited (motor cycle components supplier) and Tema India Limited (design and manufacture of high pressure heat exchangers)

The Offer Document said that preliminary due diligence on COL had been carried out by external professionals. SGL intended to participate actively in the company's affairs with the aim of further developing the business.

At present, SGL has no intention of redeploying COL's existing fixed assets or making any changes to its employees' structure. They expect to continue to employ existing employees of the company but will take steps to fill up skills gaps required for the long-term enhancement of the business especially in the area of technology.