Carson Cumberbatch PLC completed a Rs.4.1 billion restructure on the Colombo Stock Exchange (CSE) on Friday to regionalize its oil palm investments in Malaysia and Indonesia under a Singapore incorporated plantation holding company.
"These transfers do not constitute an effective change in the shareholding structure of these companies since these four majority stakes still continue to be held by a fully owned subsidiary of the Carsons Group," Carsons said in a Stock Exchange filing.
Mr. Mano Selvanathan, one of the two major owners of Carsons, said soon after the sale of the majority shares of four Colombo incorporated companies with plantations in Malaysia that it was an ``internal’’ transaction adding ``we won’t sell off our Malaysian estates.’’
The restructure involved Carsons transferring its majority holdings in four listed oil palm companies, Shalimar Malay PLC, Selinsing PLC, Indo Malay PLC and Good Hope PLC to a fully owned regional plantation holding subsidiary, Goodhope Asia Holdings Limited.
The transfer was done with all necessary approvals from Exchange Control which permitted the Carsons Group to hold its plantation linked assets through a regional base in Singapore, the company said.
"The transfers took place through the trading floor of the Colombo Stock Exchange at current market prices," the Stock Exchange filing said.
Under the restructure, Carsons will receive shares of Goodhope Asia at equivalent value of the companies transferred to the holding entity.
Carsons said that in addition to the transfer of its majority stakes to the regional holding company, smaller stakes of the oil palm companies that had been held by some of the group’s investment companies, Watapota, Weniwella and Mylands Investments, have also been transferred to Goodhope Asia through a similar trade on the CSE.
In addition to the oil palm shares, group holdings in Equity One PLC, a Carson’s property subsidiary, have also been transferred to Carsons as part of the same restructuring exercise.
"This strategy would enable the group to establish a stronger presence in the palm oil industry in its home base in South East Asia. The major industry players in the oil palm industry are based in Malaysia, Indonesia and Singapore," Carsons explained.
This would give the conglomerate quoted on the Colombo Stock Exchange the opportunity to become a fully integrated player within the industry to support the expansion of the current plantation business base.
The group currently has 80,000 hectares of oil palm plantations in Indonesia and Malaysia and a palm oil processing capacity of 270 mt. per hour in addition to infrastructure to support logistics and supply chain management.
"The larger players within the industry have ventures in downstream processing and value added products which are a natural extension to the upstream business, once economies of scale are established," Carsons explained.
The company said that a business base in the region would also permit Goodhope Asia to source strategic partners, financiers, buyers and suppliers with ease, thereby facilitating the rapid expansion of the business base and link up with industry groupings and policy forums related to the industry.