Sri Lanka’s Hatton Plantations buys control of mini hydropower company
Sri Lanka’s Hatton Plantations PLC has reportedly announced moves to buy control of mini hydropower firm Mark Marine Services Ltd., for Rs. 455 million in a development, signalling diversification to renewable energy.
The Company has reportedly stated that a Share Sale and Purchase Agreement has been signed with owners of the collective stake of 95.43% or 4.38 million shares at Rs. 108.84 each in a deal worth Rs. 455 million.
Mark Marine Services Ltd. is a company in which Central Finance PLC and subsidiary CF Insurance Brokers hold 56.79% stake and agreed to sell the holding for Rs. 270.7 million, of which Rs. 148.77 million had been received as an advance payment, local media reports have stated.
Hatton Plantations will be acquiring the remaining stake from Mark Marine Services (owning 1.7 million shares) and several individuals owning one share each. These shareholders, too, had been paid an advance amounting to Rs. 101.23 million.
According to reports, Mark Marine Services operates a 2.5 MW mini hydropower generation plant in Watawala, an area in which Hatton Plantations has core interests and venture was set up in 1997 and began commercial operations in 1995. As at 31 March, the cost of investment of 57% stake was stated at Rs. 27.57 million, and market/fair value at Rs. 48.3 million
In 2019, Estate Management Services Ltd. had divested a majority controlling stake of Hatton Plantations to Lotus Renewable Energy Ltd., and its ultimate parent being Renewables (Singapore) Ltd.
For FY21, Hatton Plantations had reportedly recorded a revenue of Rs. 4.18 billion, up 48%, and operating profit of Rs. 528.4 million, as against a loss of Rs. 78.7 million.
Sri Lanka’s power sector, especially the sustainable energy generation sector, is fast expanding as an emerging business/investment opportunity in the country. With Sri Lanka fast becoming a business hub in the South Asian region, there has been a clear growth in demand for power, which in turn has brought about a looming power crisis. Foreign businesses/investors could therefore confidently explore business/investment opportunities in Sri Lanka’s power sector.
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