Why CITK has invested their IPO and PP funds in CLND?

seek · 1 Why CITK has invested their IPO and PP funds in CLND? Tue Apr 02, 2013 5:14 pm

seek

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CITK has invested their IPO and PP funds in CLND by purchasing 20.22% of CLND shares.

They have justified that decision various ways.

But why they select CLND to achieve their objectives?

They could have invested that money in shares of a Blue Chip company like SAMP, COMB, JKH etc or they could have bought some stake of already functioning hotel chains like STAF. Such a decision seems to be less risky and provides higher gain than CLND.

Jiggysaurus

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@seek wrote:CITK has invested their IPO and PP funds in CLND by purchasing 20.22% of CLND shares.

They have justified that decision various ways.

But why they select CLND to achieve their objectives?

They could have invested that money in shares of a Blue Chip company like SAMP, COMB, JKH etc or they could have bought some stake of already functioning hotel chains like STAF. Such a decision seems to be less risky and provides higher gain than CLND.

When jokers like Rishan and Disc Jockey's run companies they will use minority shareholder money for their own ends. They will justify their decision in various ways.

CITK selected CLND because both are owned by the same person and he needed to move money from one pocket to the other.

In future CITK minority shareholder are supposed to get platinum mine type returns from this investment in CLND.

WildBear

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The whole REEF group reaching bottom these days, Do not know what is waiting to happen. Basketball

UKboy

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I have been told that D Jay bought CLND shares at a low price and sold it to CITk for a higher price. So all the money from CITK IPO used to buy these CLND shares from D Jay.
However D Jay has never reinvested that money in a listed company.
He has nothing to lose.
After evaluating all the scenarios, I bought some REEF warrants. Nothing much to lose from a Rs 2.4 share..!

WildBear

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@UKboy wrote:I have been told that D Jay bought CLND shares at a low price and sold it to CITk for a higher price. So all the money from CITK IPO used to buy these CLND shares from D Jay.
However D Jay has never reinvested that money in a listed company.
He has nothing to lose.
After evaluating all the scenarios, I bought some REEF warrants. Nothing much to lose from a Rs 2.4 share..!

Good choice from the REEF group, though it's a risk play this can become a multi bagger when the CITW become operational from mid this year, and CITK in late 2014(At least the villas if not the hotel)

Slstock

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REEF.W19 seems a bit less risky with expiry in 2015. I am also averaging a bit these days.

CSF.W can bring some drama in june. ( good or bad)

@WildBear wrote:

@UKboy wrote:I have been told that D Jay bought CLND shares at a low price and sold it to CITk for a higher price. So all the money from CITK IPO used to buy these CLND shares from D Jay.
However D Jay has never reinvested that money in a listed company.
He has nothing to lose.
After evaluating all the scenarios, I bought some REEF warrants. Nothing much to lose from a Rs 2.4 share..!

Good choice from the REEF group, though it's a risk play this can become a multi bagger when the CITW become operational from mid this year, and CITK in late 2014(At least the villas if not the hotel)

seek

seek

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@slstock wrote:REEF.W19 seems a bit less risky with expiry in 2015. I am also averaging a bit these days.

CSF.W can bring some drama in june. ( good or bad)

@WildBear wrote:

@UKboy wrote:I have been told that D Jay bought CLND shares at a low price and sold it to CITk for a higher price. So all the money from CITK IPO used to buy these CLND shares from D Jay.
However D Jay has never reinvested that money in a listed company.
He has nothing to lose.
After evaluating all the scenarios, I bought some REEF warrants. Nothing much to lose from a Rs 2.4 share..!

Good choice from the REEF group, though it's a risk play this can become a multi bagger when the CITW become operational from mid this year, and CITK in late 2014(At least the villas if not the hotel)

Good to know that two co-admins are also in same boat.

seek

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If we can trust the MDs word as mentioned below, addition of Citrus Pasikuda to the hotel chain during late 2014 will give additional boost the REEF future value.

http://forum.srilankaequity.com/t27139-progress-of-the-citrus-leisure-reef

Jiggysaurus

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@seek wrote:If we can trust the MDs word as mentioned below, addition of Citrus Pasikuda to the hotel chain during late 2014 will give additional boost the REEF future value.

http://forum.srilankaequity.com/t27139-progress-of-the-citrus-leisure-reef

They can even add a Citrus Lemon Juice but all of the new hotel construction will have be funded by debt or another rights issue. They don't have much cash on the balance sheet because the disc jockey basically stole the CITK minority shareholders IPO money to cash out his CLND investment.

According to one of the posts on the forum these jokers couldn't even calculate an EPS properly so do you think they can manage a debt load efficiently?
http://forum.srilankaequity.com/t4342-reef-and-vfin-accountants-who-can-t-calculate

seek

seek

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no i don't.

Chinwi

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As per the prospectus of CITK, they used pre IPO money to buy Colombo land.

Investments by Kalpitiya Beach Resort Ltd

The LKR 403,500,000/- raised on the Private Placement of 40,350,000 Shares and LKR 700,000,000/- raised on issue of shares to parent for cash has been utilized to fund the following transactions.

Equity Investments in Colombo Land & Development Co. PLC (CLND)

CLND.N000
20th May 2011 19,987,400 shares @ 20.21 Rs. 403,945,354
CLND.N000
2nd June 2011 20,351,200 shares @ 44.00 Rs. 895,557,501

Total shares :40,338,600 Total Investment 1,299,502,855
Average Cost = 32.21 per share

Kalpitiya holding % of CLND = 20.18%

(CITK prospectus- Page 13)

As per the latest CLND FR, CITK is the second largest shareholder with 40,413,200 shares.

That means, Rs. 283 million collected in IPO was not utilized to buy CLND.
(IPO = 16.2 million shares @ 17.50 in November 2011)

CSE.SAS

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@Chinwi wrote:As per the prospectus of CITK, they used pre IPO money to buy Colombo land.

Investments by Kalpitiya Beach Resort Ltd

The LKR 403,500,000/- raised on the Private Placement of 40,350,000 Shares and LKR 700,000,000/- raised on issue of shares to parent for cash has been utilized to fund the following transactions.

Equity Investments in Colombo Land & Development Co. PLC (CLND)

CLND.N000
20th May 2011 19,987,400 shares @ 20.21 Rs. 403,945,354
CLND.N000
2nd June 2011 20,351,200 shares @ 44.00 Rs. 895,557,501

Total shares :40,338,600 Total Investment 1,299,502,855
Average Cost = 32.21 per share

Kalpitiya holding % of CLND = 20.18%

(CITK prospectus- Page 13)

As per the latest CLND FR, CITK is the second largest shareholder with 40,413,200 shares.

That means, Rs. 283 million collected in IPO was not utilized to buy CLND.
(IPO = 16.2 million shares @ 17.50 in November 2011)

Your correct Chinwi. I m also about to comment this matter.

Thanks.

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Why CITK has invested their IPO and PP funds in CLND?

1 Why CITK has invested their IPO and PP funds in CLND? Tue Apr 02, 2013 5:14 pm

seek

2 Re: Why CITK has invested their IPO and PP funds in CLND? Tue Apr 02, 2013 5:29 pm

Jiggysaurus

3 Re: Why CITK has invested their IPO and PP funds in CLND? Tue Apr 02, 2013 6:25 pm

WildBear

4 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 4:25 am

UKboy

5 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 4:42 pm

WildBear

6 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 4:55 pm

Slstock

7 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 5:02 pm

seek

8 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 5:08 pm

seek

9 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 5:23 pm

Jiggysaurus

10 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 5:57 pm

seek

11 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 8:27 pm

Chinwi

12 Re: Why CITK has invested their IPO and PP funds in CLND? Wed Apr 03, 2013 8:56 pm

CSE.SAS

13 Re: Why CITK has invested their IPO and PP funds in CLND?

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