Sri Lanka’s Laugfs Gas PLC to go for strategic restructuring to create investment opportunities

Sri Lanka’s Laugfs Gas PLC to go for strategic restructuring to create investment opportunities

Chairman of Sri Lanka’s a Laugfs Gas PLC, W.K.H. Wegapitiya has reportedly 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.
“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,” Wegapitiya has told a press conference in Colombo recently.
“Through the restructuring process we expect to attract foreign strategic investors with specific knowledge in the energy segment.”
The 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, Wegapitiya has added.
According to reports, the company the only private sector player in the LPG market in Sri Lanka has 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.
Reports further state that 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 Securities and Exchange Commission (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.
The Board of Directors of LGL had on December 28, 2017 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 foreign direct investment (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.
Capital Alliance Partners Limited, a leading investment bank has assisted the restructuring process.

OSL take:

The restructuring process of Laugfs Gas PLC with the aim of creating opportunities for investors to invest in individual businesses and foster concentrated growth opportunities has opened up the opportunity for foreign investors/businesses to invest in a continuously growing local company. On the other hand, other local companies could take the example set by Laugfs Gas to build up and promote their businesses as well.

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Article Code : VBS/AT/20180312/Z_5

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