LAUGFS awaits going public with more than six subsidiaries
View(s):LAUGFS Holdings on the back of carrying out three resort hotel projects is awaiting a revival in the Colombo stock market to go public with more than six of its companies.
According to W.K. Wegapitiya, Chairman LAUGFS Holdings, LAUGFS Eco Sri, LAUGFS Leisure and a few other firms had been preparing to go public, before the crisis hit the share market.
“Arrangements to improve are internal processes, etc and were made as these are essential for listing, but plans were dragged due to this unhealthy market situation,” he told the Business Times.
LAUGFS has bought Softlogic Micro Credit, a leasing company from Softlogic Capital in a bid to enter the financial sector, in its journey to becoming a fully-fledged conglomerate. “We concluded this transaction on 31st December for Rs 103 million,” Mr. Wegapitiya added.
He said that with LAUGFS’ extensive customer reach (with 30 super markets, 2,500 gas dealers, filling station network) and strong local brand, the company saw synergies that made sense for them to progress into the financial sector.
Also with the macro economic situation which sees rising GDP along with projected increases in per capita income growth, LAUGFS saw an opportunity to capitalise on these prospects through entering the financial sector, he said.
“We are also trying to reach rural customers, which is also a reason to expand into this area,” he said, they plan to infuse Rs 400 million and change its name (the micro credit acquisition) to LAUGFS Capital by next month.
LAUGFS Corporation (Rubber) Ltd which is manufacturing solid industrial tires recently got the 9001:2008 certification. Mr. Wegapitiya said that at present the production is exported to USA, Germany, Belgium, Poland, France and several other destinations. Under the agreement made with the Board of Investment, 20 per cent of the production is allowed to be sold in local markets subject to the condition of payment of relevant custom duty and other applicable levies including corporate tax, he said.
He added that the leisure sector is a big part in their portfolio. “The Chilaw resort hotel, which is a 4-star resort with 88 rooms will be completed within two months,” Mr. Wegapitiya said. The Chilaw hotel costs some Rs 1.5 billion, while the 110-room resort at Pasikudah will cost Rs. 2.5 billion. “This is also a 4-star resort and we plan to complete this project within 18 to 24 months,” Mr. Wegapitiya said. He added that LAUGFS plans starting construction on the 250-room, 4- star resort at Waskaduwa in August. It will cost Rs. 3.5 billion.
He said that LAUGFS which was managing Emerald Bay Hotel, a 50-room property and also Temple Tree and Spa, a small luxury hotel consisting of 10 rooms – both in Induruwa – had handed them back to their owners more than a year ago.
By 2015, the company expects 50 supermarkets and hopes to increase it up to 100 by 2020. Mr. Wegapitiya added that LAUGFS will change its super marketing to a different scope such as standalone large units.
“We see immense growth here,” he said. He said LAUGFS has grown into some 19 firms in diversified sectors within the last 15 years since it started. “This year we’ll only go for consolidation,” he said.
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