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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » ANILANA HOTELS AND PROPERTIES PLC (ALHP.N0000)

ANILANA HOTELS AND PROPERTIES PLC (ALHP.N0000)

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1ANILANA HOTELS AND PROPERTIES PLC (ALHP.N0000) Empty Anilana Hotels & Proprieties - IPO Wed May 29, 2013 2:14 pm

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
http://www.cse.lk/cmt/upload_cse_announcements/1221369814950_.pdf - Sometime back one member spoke about this, if am not mistaken!

sriranga

sriranga
Co-Admin
http://www.cse.lk/cmt/upload_cse_announcements/1221369814950_.pdf

ANILANA HOTELS AND PROPERTIES PLC (ALHP.N0000) Anilan10

http://sharemarket-srilanka.blogspot.co.uk/

Bond


Manager - Equity Analytics
Manager - Equity Analytics
Interesting!




Last edited by Bond on Wed May 29, 2013 2:24 pm; edited 1 time in total

sriranga

sriranga
Co-Admin
Related article
http://forum.srilankaequity.com/t14956-sri-lanka-newspapers-15-01-2012#97188

http://sharemarket-srilanka.blogspot.co.uk/

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
@ Bond, i referred the post by Rainmaker!

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
http://forum.srilankaequity.com/t26213-what-are-the-public-and-private-entities-in-the-pipe-line-to-be-listed-on-cse#168446

Bond


Manager - Equity Analytics
Manager - Equity Analytics
@Gaja wrote:@ Bond, i referred the post by Rainmaker!

What about Rainmaker, Rank holdings and Delmege? When will they list?
Then we'll put out Gaja Fund Razz

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
Anilana Hotels to raise funds via an IPO
Sri Lanka’s Anilana Hotels and Properties PLC is planning to raise up to Rs. 960 million via an IPO which will open the subscription list on the 12th June 2013.

A disclosure by the CSE said, the firm will issue up to 80 million ordinary shares with each priced at Rs. 12.

The Company will initially offer 40 million shares, while it will raise the figure to 80 million shares in case of an over-subscription.

The shares would be listed on the Diri Savi Board of the CSE.

Anilana Hotels owned by Businessman Asanga Seneviratne is engaged in building up a series of leisure properties across the country.

The money once raised would be utilized to help build those properties.
http://www.news360.lk/business-finance/news-sri-lanka-29-05-2013-hotel-group-to-raise-up-to-rs-960-million-via-an-ipo-6675543

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
Popular fund manager turned high net-worth investor and entrepreneur Asanga Seneviratne is braving fresh challenges as his Rs. 980 million equity raising exercise for boutique style Anilana Hotels and Properties Ltd., (AHPL) will be the first Initial Public Offering (IPO) in more than a year.

The company is coming to the market with an IPO of 40 million ordinary voting shares at Rs. 12 each with an option to issue a further equal amount in the event of an oversubscription.

The CSE has approved Anilana’s application for the listing on the Diri Savi Board.

The IPO will be up for subscription from 3 June whilst its official opening is 12 June.

The last IPO the Colombo Bourse saw was the Rs. 350 million equity raising by Mackwoods Energy in March last year. Due to the crisis in the market due to a combination of reasons involving capital market regulatory authority, investors and brokers, their robust flow of IPOs came to an end early last year. Of the 17 new listings in 2012 only six emanated from IPOs and the rest via introductions.

In 2011 there were 13 IPOs raising a record Rs. 19.2 billion.

AHPL at presents operates a 60-room boutique hotel in Pasikudah and has plans to expand the portfolio in the East as well as in the cultural triangle in addition to the South.
http://www.ft.lk/2013/05/30/asangas-rs-960-m-equity-raiser-for-anilana-first-ipo-in-more-than-a-year/

Jeremy

Jeremy
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
http://www.lankabusinessonline.com/news/sri-lanka-accounting-watchdog-reveals-valuation-tricks/29811733

Unfair Value
Sri Lanka accounting watchdog reveals valuation tricks
July 27, 2011 (LBO) - A Sri Lankan accounting watchdog has revealed how companies inflate their profits and balance sheets using false revaluation techniques that in two cases led to initial public offer applications being rejected.
New accounting standards coming in January 2013 will provide more clarity on fair value and revaluation methods, said Ajith Ratnayake, director general of the Sri Lanka Accounting and Auditing Standards Monitoring Board which monitors company financial statements.

New Standard

These are part of the International Financial Reporting Standards (IFRS) that set out a framework for measuring fair value and require disclosures about fair value measurements.

Two recent IPO applications sent to the SLAASMB for vetting by the Securities and Exchange Commission were not approved after they rejected revaluations by the companies, Ratnayake told the 36th LBR - LBO CEO Forum.

It was a panel discussion on 'Convergence of accounting standards in 2012: are CEOs ready?' organised by Vanguard Management Services in association with Sri Lanka Telecom at the Ceylon Continental Hotel on July 21.

Most of the new standards are going to come from January 2012 but SLAASMB is particularly concerned by IFRS 13 which relates to fair value measurements and comes into effect by January 01, 2013, Ratnayake said.

"That is a standard we as a regulator will watch for and ensure it is well complied with. This new standard, IFRS 13, will give you greater guidance and greater clarity as to how the fair value should be measured. That's something we will regulate a little more carefully in terms of fair value measurements."

Ratnayake gave two recent examples where the SLAASMB had to intervene to prevent problems in the future.

Bloated Property

One case referred by the SEC was an IPO application where the company had re-valued property, plant and equipment at a substantial valuation.

"A property that had been bought in June 2010 - just a year ago - at the rate of 137 rupees a perch was re-valued in March this year at 100,000 rupees per perch - 137 rupees going up to 100,000 rupees a perch," Ratnayake said.

"Then in September 2010 they bought another property at 37,000 rupees per perch and then again in March 2011 - about six months later - it was valued at 300,000 rupees per perch.

"And in November 2010 they had bought another property for 56,000 rupees per perch and again re-valued in March 2011 - just six months after - at 100,000 rupees per perch. And these re-valuations had given rise to 900 million rupees revaluation surplus."

The 900 million rupees arising from the difference in revaluation were issued as bonus shares - assets coming in the balance sheet and increasing the net assets - to the owners.

"Now they apply for an IPO," Ratnayake said. "We looked at it and then we also consulted the chief valuer and we said this cannot be accepted. The SEC did not allow the IPO to proceed. So the IPO did not see the light of day."

In the second case, a company bought several items of property, plant and equipment and built up a complex with the cost of the work in progress valued at 484 million rupees.

Valuation

"After the project was complete this was transferred to property, plant and equipment as a fixed asset," Ratnayake said.

"The 484 million rupee cost item was re-valued to 854 million rupees and a gain of 370 million rupees recorded in the books. This gain of 370 million rupees was used to issue bonus shares but not in proportion - the chairman was given a higher proportion than his shares in the equity of the company.

"This also came for an IPO. We looked at it and again we knew there was a problem. We also discussed with the chief valuer and we rejected that valuation. Therefore, the IPO did not see the light of day," Ratnayake said.

"If we had not looked at these things then you would have seen the extent to which people who apply for these IPOs would have got misled and would have thought the company had a certain different value and would have bought shares and they would have lost on those shares," he added.

"So fair valuation is an important area that has to be watched carefully," Ratnayake said.

The SLAASMB has also seen companies that have used models using false or inappropriate estimates and coming out with substantially big values which are not really true.

"So these are things for which there will be some guidance given in IFRS 13 but it does not solve the problem completely because there is still a judgement that is there," Ratnayake said.

"But there will be better guidance than that is available today in IFRS 13 and we will look to see whether that guidance has been appropriately applied by the companies when it comes to the future valuations."

Chartered Valuers

Ratnayake also noted that some of the valuations rejected by regulators had been done by chartered valuers who were unable to justify their valuations.

"Mind you, these valuations that we have seen have been valued by chartered valuers and the valuations have been supported by them," he said.

"But the problem is the assumptions are not correct. There are issues related to the assumptions. Sometimes when a chartered valuer comes in front of us, we ask 'why did you make those assumptions', what is the basis on which they made the valuations, and they don't have an answer.

"Sometimes they just say 'my professional judgement'. That's all. What is the basis of the professional judgement, they cannot explain," Ratnayake said. "So these are some of the things one will have to watch for."

Fair valuation is something SLAASMB would look at closely to see if it has been done appropriately particularly if the company has substantial value on a particular asset and that asset has been fair valued.

"Then we will look into that company because that is something that can change the picture that is shown in the balance sheet and change the picture that is shown as profit in the financial statements. So these we will watch carefully."

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
Is this related to the ANILANA?
Quite possible!

kukumarx


Manager - Equity Analytics
Manager - Equity Analytics
@salt wrote:Is this related to the ANILANA?
Quite possible!

Perhaps referring to ACAP IPO in 1994

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@salt wrote:Is this related to the ANILANA?
Quite possible!

We must read the prospectus carefully. It is coming out this week.


--

මෙන්න හොරකම් කරන හැටි . මේ සෙල්ලම ලස්සනට, කරදරයක් නැතුව කළේ Dialog.
එක හැන්ඩ්ල් කලේ NDB . ඒ කාලේ par value ශේයස් තිබුනේ .
අයිතිකාරයෝ රුපියල් 1 බැගින් නොමිලේ බෝනස් ශේයස් තමන්ට බෙදාගෙන ඒවා රුපියල් 12 ට මිනිස්සුන්ට දුන්නා

Say you invested 1 billion to buy a company with 1 billion (1000 million) 1/-rupee shares. Then wait few months and revalue its assets to 1.3 billion
Then issue 300 million 1/- Rupee bonus shares to you to match that increase. ( free of charge)
Then you sell those shares @ 12/- each to public at IPO.

You earn 300m x 12 = 3600 million (3.6 billion). Still you have 76 % holding. Cost of holding is Zero with 2.6 b instant profit. This was what DIAL Malaysian owners did to our fools.

WE MUST ALWAYS READ THE PROSPECTUS very carefully to detect these HORAKAM.

They usually print big books and hide those important information in a corner of a page somewhere in the mid section of the book.

K.Haputantri

K.Haputantri
Co-Admin
Thanks GMnet for an eye openning article side by side with an IPO article. I am glad that SEC has heard what we expressed in this forum some time back on highly inflated & fake IPO prices followed by private placements at much lesser prices allowing their friends to feed on innocent retailers.

kukumarx


Manager - Equity Analytics
Manager - Equity Analytics
@Chinwi wrote:
@salt wrote:Is this related to the ANILANA?
Quite possible!

We must read the prospectus carefully. It is coming out this week.


--

මෙන්න හොරකම් කරන හැටි . මේ සෙල්ලම ලස්සනට, කරදරයක් නැතුව කළේ Dialog.
එක හැන්ඩ්ල් කලේ NDB . ඒ කාලේ par value ශේයස් තිබුනේ .
අයිතිකාරයෝ රුපියල් 1 බැගින් නොමිලේ බෝනස් ශේයස් තමන්ට බෙදාගෙන ඒවා රුපියල් 12 ට මිනිස්සුන්ට දුන්නා

Say you invested 1 billion to buy a company with 1 billion (1000 million) 1/-rupee shares. Then wait few months and revalue its assets to 1.3 billion
Then issue 300 million 1/- Rupee bonus shares to you to match that increase. ( free of charge)
Then you sell those shares @ 12/- each to public at IPO.

You earn 300m x 12 = 3600 million (3.6 billion). Still you have 76 % holding. Cost of holding is Zero with 2.6 b instant profit. This was what DIAL Malaysian owners did to our fools.

WE MUST ALWAYS READ THE PROSPECTUS very carefully to detect these HORAKAM.

They usually print big books and hide those important information in a corner of a page somewhere in the mid section of the book.


Not only assets, future earnings can also be grossly over estimated and this can be used to inflate issue price

K.Haputantri

K.Haputantri
Co-Admin
I have few questions to relevant authorities;

1. What action SLAASMB has taken against the Auditors of that company whose application was rejected? Surely auditors too should take some responsibility.
2. What action the Chief Govt., Valuer & their professional body taken against the chartered valuers who certified wrong valuations without any basis?
3. What further action SEC would take under the circumstances?
4. What is the progress in the proposed issue of licenses to qualified professionals involved in preparation of prospectus and other promotional material etc., by the SEC?

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
Who is head of SEC?

malanp


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

That is why as a policy, I never subscribe to IPOs.

there should be sufficient EPS before we buy shares.

Bond


Manager - Equity Analytics
Manager - Equity Analytics
There are some half truths to the above. Anilana has new and old hotels. Some of those have reviews already which you can check out

Amongst the lead investor is HSBC International and Pershings and the issue would probably be oversubscribed.

With regards to new hotels, Asanga purchased the land when the war ended so the purchase price was low.

There is also a hotel in Kalpitiya. Lot of activity in that region.

seek


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
If I am not mistaken, Asanga had the first mover advantage in some locations in eastern beach. When he bought those lands the war in north had not seen an end. He got the risk and bought those at damn cheap.

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