Blue Ocean Group buys 60% of Kelsey Developments for Rs. 257 million.
Daily FT: Blue Ocean Group has recently acquired 60% stake in Kelsey Development PLC for Rs. 257 million.
The stake amounting to 10.457 million shares was done at Rs. 24.60. The sellers were Schaffter brothers Praksah and Ramesh who held 30% each.
With the acquisition of control, Kelsey will be a member of the Blue Ocean Group, a pre-eminent real estate conglomerate with a well-balanced portfolio, founded by top professional cum business leader Sivarajah Thumilan who is also the Chairman and CEO.
Control of Kelsey was held by Janashakthi Ltd. and related parties. In September the parent Janashakthi Ltd., sold its entire stake of 85.24% or 14.85 million shares Kelsey to its ultimate shareholders Prakash and Ramesh with a view of restructuring the internal balance sheet of the Janashakthi Group. The transaction was done at Rs. 24.60 per share.
With the acquisition Blue Ocean will have to make a mandatory offer to the remaining shareholders. As at the end of June 2022, the public holding of Kelsey was 14.76% held by 1,100 shareholders. Net assets per share as at end June 2022 was Rs. 15.37.
Incorporated in 1983, Kelsey Developments provides specialist operations in real estate development through two subsidiaries, Kelsey Homes Ltd. and Kelsey Homes (Central Park) Ltd. Kelsey Homes has completed over 200 projects serving over 2,000 satisfied homeowners, creating a considerable portfolio of superior accommodation.
Kelsey as at 30 June had Rs. 875.7 million in retained losses at group level and positive retained earnings of Rs. 35 million at company level. In the 1Q of FY23, Group revenue grew to Rs. 132 million from Rs. 50 million a year ago. Pre-tax loss was Rs. 61 million, up from Rs. 39 million in 1Q of FY22.
Blue Ocean Group has been one of the prominent organisations in the fields of real estate, construction, and engineering with a large customer base traced both locally and internationally.
The OSHAS 180001:2007, ISO 14001:2015 and ISO 9001:2015 certified company specialises in the design, construction, and project management as well as providing sustainable property investment solutions to its clientele.
The multifaceted organisation has multiple businesses under its authority such as, Link Engineering, Blue Ocean Residencies, Link Ready Mix, Contessa, Blue Ocean Travels, Blue Ocean home appliances, Blue Ocean Facility Management, Sisira Engineering and KBBS Campus. The Group currently has a number of condominium projects as well as a variety of public and government projects such as hospitals and universities.
OSL take:
This acquisition in Sri Lanka’s real estate industry is indicative of the expanding opportunities in the sector. The overall expansion in economic activities and the many incentive schemes aimed at wooing foreign businesses/investors in to the country have had an impact on Sri Lanka’s real estate development sector. There has been an increase in land value in the past few months while housing units constructed and put on sale also recording an increase. Given the growing interest in Sri Lanka by foreign businesses/investors, an investment in the real estate development industry could yield definite return on investment. Also, given the growth and business potential in Sri Lanka’s real estate development sector, foreign businesses/investors could look at forming partnerships or joint ventures with local businesses engaged in the sector with the aim of further expansion.
| Article Code : | VBS/AT/19122022/AT_4 |