Shaw Wallace said it has entered into a Sales Agreement to sell, subject to shareholder approval, an extent of 264.65 perches land in Colpetty for Rs. 1.85 billion to Avic International Hotels Lanka Ltd.
Avic/CATIC was previously keen on Galle Face land but backed out because it was leased land with price per perch of over Rs. 8.5 million. It had found the Shaw Wallace land attractive apart from it being freehold. As per the deal, the price paid by CATIC is Rs. 6.5 million per perch, and plans to put up a mega hotel project.
Shaw Wallace will use the sales proceeds to finance the on-going 30-storied development project in the adjoining land where the piling and sub structure work has been completed.
The Company will convene an EGM to get shareholder approval for the sale.The announcement saw the illiquid Shaw Wallace’s stock price hit a peak of Rs. 304.50 before settling down at Rs. 296.60, still up by Rs. 22.60 or 11% with 38,126 shares traded. On Thursday when the sale was preliminary announced without price details, Shaw Wallace gained by Rs. 69 to close at Rs. 274 as opposed to Tuesday’s closing of Rs. 205.
In comparison to previous week’s closing, yesterday’s finish was an increase of Rs. 81.70 or 38%. Last week Shaw Wallace rose by Rs. 14.90 to close at Rs. 214.90 with 40,351 shares traded. The 52-week highest is Rs. 410.