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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Sri Lanka's Dhammika Perrea extends business empire

Sri Lanka's Dhammika Perrea extends business empire

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May 06, 2013 (LBO) - Dhammika Perera, head of Sri Lanka's Vallibel group who has made a series of daring acquisitions says he has effective control of nearly a tenth of listed firms in the island after buying over the latest clutch of five companies.

On Monday, Royal Ceramics Plc, a unit of listed Vallibel One Plc in which Perera owns 63.5 percent, bought a 79 percent stake in Lanka Ceramics from listed Ceylon Theatres group for 2.9 billion rupees.

In addition to Lanka Ceramics, the holding company, the acquisition brought in operating units, Lanka Walltiles, Lanka Tiles, Swisstek, an aluminum company and Horana Plantations, a tea estate.

"We now have a monopoly in ceramic tiles and aluminum industries," Perera said.

Sri Lanka's listed Hayleys group in which Perera owns 44 percent gained control of an unlisted aluminum extrusion firm Alumex, in 2010 for 2.1 billion rupees. Hayleys said at the time it had a 55 percent market share.

Perera personally owns a 29 percent stake in Lanka Alluminium, another listed company.

Royal Ceramics also owns the country's only sanitary wear producer, which is unlisted.

Perera said Horana Plantations would be a strategic fit with Talawakele and Kelani Valley Plantations of the Hayleys group.

Perera said he now had control of 28 out of 280 odd listed companies in the market.

Vallibel One has seven listed companies under its umbrella with the latest acquisitions and Hayleys group nine.

Perera also controls Vallibel Finance and Vallibel Power Erathne.

Among the more widely known material stakes in listed companies include Fortress Resorts, Pan Asia Bank and Sampath Bank.

He also owns stakes in unlisted companies in power generation and gaming.


Vice President - Equity Analytics
Vice President - Equity Analytics
vallible two is very close


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@cseguide wrote:vallible two is very close

Well said. They talked about this long time ago.


Manager - Equity Analytics
Manager - Equity Analytics
Amalgamation of Ceylon theaters next, CTHR

5Sri Lanka's Dhammika Perrea extends business empire Empty In their DNA! Tue May 07, 2013 10:30 am


The duo does have a knack for it or perhaps it is in their DNA, as the market saw yet another DNA as one analyst coined it the Dhammika – Nimal Acquisition.

Giving a major boost to the country’s corporate sentiment, which had been under gloomy weather for some time, Dhammika and Nimal yesterday effected their 18th acquisition when related parties acquired a controlling 80% stake in Lanka Ceramics Plc, from CT Holdings Plc of the Ceylon Theatres Group. High net worth investor and Director Dr. T. Senthilverl also sold his 7% stake.

The acquisition was via Royal Ceramics Plc, which picked up 76% stake along with Vallibel One (3.3%), Nimal Perera (3.3%) on his personal account, and Lanka Ceramics Chairman Anthony Page (3.3%), Dr. Sellaiah and Managing Director Rajiv Casie Chitty. Page previously had a 1.17% stake.

RCL’s acquisition of Lanka Ceramics is part of consolidating its dominant position in the ceramics tiles and bathware market in addition to wooden flooring business and packaging. With Hayleys’ and Dhammika’s interests, the Group also gets control of the aluminium industry which is booming in tandem with post-war construction spree. Additionally is the stronger foothold in rubber plantation business.

Nimal Perera told the Daily FT that after Hayleys Plc, this was the most important acquisition under the D&N combination. The duo to date has made nearly 20 acquisitions or strategic investments.

Nimal, who is the Managing Director of RCL and Chairman of Pan Asia Bank, also said that the deal was finalised within a week largely on the goodwill of and the strong ties with Anthony Page, whose was appointed to Pan Asia Bank in April 2008 even when he was serving on the Board of Lanka Ceramics.

The entire acquisition is financed by HNB, whose Acting CEO Jonathan Alles was commended by Nimal for agreeing to the deal via a call over the weekend.

Direct subsidiary of Lanka Ceramics is Lanka Walltiles Plc in which it holds 62% whilst other indirect subsidiaries are Horana Plantations Plc (17%), Ceytea Plantation Management Ltd. (33%), Lanka Floortiles Plc (34%), Uni Dil Packaging (33%), Uni Dil Paper Sacks (33%), Swisstek (Ceylon) Ltd. (23%) and Swisstek Aluminium Ltd. (20%).

RCL said in a filing to the CSE that it acquired a 76.1% stake or 22.83 million shares between Rs. 86.90 and Rs. 120 per share with bulk done at the latter price. A mandatory offer will be made by all parties acting in concert shortly. In total 26.92 million shares of Lanka Ceramics traded for Rs.3.2 billion via 419 trades with an intra-day highest price of Rs. 120 and a lowest of Rs. 82 before closing at Rs. 120, up by Rs. 40.

Lanka Ceramics’ asset per share is Rs. 17 (at Company level) and Rs. 83 (at Group level). Earnings per share is Rs. 5.47 down from Rs. 8.90 at group level at the end of third quarter of FY13. Last week Lanka Ceramic figured among the top five gainers percentage with near 18% or Rs. 12 to close at Rs. 80 though only 241,338 shares traded.

Related party Lanka Floortiles Plc closed up by Rs. 4 to Rs. 69 after hitting a peak of Rs. 70. Investors also toasted RCL in anticipation of major boost with its share price up by Rs. 3.30 to Rs. 100.50 whilst the share touched an intra-day high of Rs. 105. Horana Plantations gained by Rs. 2.30 to Rs. 28.30 with a peak of Rs. 29.80. Seller CT Holdings saw its share price jump by Rs. 8.70 to Rs. 148.20 after peaking to Rs. 150.

In the first nine months of FY13, Group turnover rose by 22% to Rs. 8.8 billion whilst profit from operations was up 17% to Rs. 1.08 billion. After tax profit was Rs. 525 million, down by 5% and profit attributable to equity holders of Lanka Ceramics was Rs. 164 million, down by 39%.

Lanka Ceramics Group assets as at 31 December 2012 was Rs. 14.3 billion, up from Rs. 12.3 billion a year earlier and Rs. 13 billion as at 31 March 2012.

Capital and reserves were Rs. 7 billion including Rs. 1.6 billion in retained profits. Liabilities amounted to Rs. 4.4 billion including Rs. 3 billion in non-current.

In FY13, Lanka Ceramics has obtained a loan amounting to Rs. 610 million from the Parent Company (C T Holdings) at the rate of interest 10% p.a. which was utilised for the purchase of Lanka Walltile PLC shares.

The Company in FY12 recorded a profit after tax of Rs. 71.4 million, a marginal decrease from the Rs. 73.7m reported in the previous financial year. The decrease was due to the sharp increase in financial costs incurred during the latter part of the year on account of investment in its subsidiary.

The Group recorded a consolidated profit attributable to shareholder of Rs. 522.7 million. This was a significant increase over that reported in the previous year of Rs. 254.9 million.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
If VTWO is to be launched, DP will want a good price for it at its IPO

So to get that done he will have to make sure his second ring companies like VFIN, PABC, VPEL, etc make big strides soon so he can launch it.

Same happened with LFIN, SAMP, RCL when VONE was launched.


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