Distilleries-controlled Melstacorp to become a holding arm
Distilleries Company PLC’s (DCSL) share transfers this week of over Rs 1 billion to its 100 per cent-owned Melstacorp, is an effort to transform it to a holding company, allowing DSCL to concentrate on its core alcohol businesses, a company official said.
Monday saw DSCL transferring 41.7 per cent in Beruwala Beach Hotels PLC to Melstacorp, 43 per cent in Balangoda Plantations PLC and 31 per cent in Madulsima Plantations PLC – all of which are DSCL’s total holding in these firms, amounting to Rs 1.04 billion. Tuesday saw 16.36 per cent in Aitken Spence PLC being transferred to Melstacorp in a Rs 7 billion deal.
“This is a part of the internal group restructuring process and we want Distilleries to concentrate on its core activities, which are brewing and distribution,” the official told the Business Times. He said that Melstacorp will be a holding company with non-core areas of DCSL under it, adding that Lanka Bell stake in DCSL is also most likely to be transferred to Melstacorp. “This move will facilitate DCSL’s ‘smooth functioning’,” he added.
However, analysts term this just an ‘accounting game’. “At the end of the day DCSL owns Melstacorp and these transfers haven’t done a ‘material’ change,” an analyst pointed out. But the official said that Melstacorp is likely to be listed once the share market conditions improve.”We will go public with this company by listing it in the Colombo Stock Exchange when the time is right,” he added.
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