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Debentures
by UDA for city work "We are planning issuing debentures to raise funds for infrastructure development," said Ministry Secretary S. Amarasekera. The debentures will be issued through the Ministry of Western Region Development. Dr. Fahmy Ismail, director UDA, and Rehab Ariff, private secretary to Western Region Development Minister, M.H. Mohamed, said the re-development of the Beira Lake alone costs Rs. 6 billion and debentures in lots of Rs. 500 million are expected to be issued to raise funds for the development programme. The three officials were briefing The Sunday Times Business of the planned development of Colombo and the other parts of the country. Under the Beira Lake project there are plans to use the main area of the lake bordering D.R Wijewardene Mawatha and the Trans Asia hotel and neighbouring buildings to promote water sports, creation of parks, cafes, lakefront restaurants and apartment buildings. In addition, 22 other projects that involve an infrastructure cost of Rs. 5 billion have been earmarked for development. These projects include commercial development of the Thalawathugoda town centre, Ragama, housing in Katuwana, some areas in Kurunegala and Kollupitiya, the Malabe IT park, the area surrounding Nuwara Eliya's Lake Gregory and Beruwela. Ariff said the National Development Bank and Citi National are working on the debenture issue to raise seed capital for infrastructure development. "In future, the UDA will raise its own funds purely for infrastructure development in new land that has been identified for commercial use," said Amarasekera. He said more than 1,000 acres have been earmarked for the new commercial development phase in Colombo, which would be entirely handled by the private sector. "We are getting the private sector involved in commercial development while the UDA will move out of this business," Amarasekera said, adding that the UDA will provide the land and guidelines but would no more be an investor. Under new rules, the UDA will fix the price of land and call for offers to develop it. The successful bidder would be the applicant with the best investment offer. "Unlike before when land was leased out to the highest bidder, the UDA will consider the best project and offer it to that party," Amarasekera said. Other officials said the previous system of offering land to the highest bidder didn't work since some 90 percent of the leased land in the city is unutilised. "It's lying idle and not developed. In some cases, the lease rental hasn't been paid," Ariff said. Ministry secretary Amarasekera said they were looking at the legality of previously issued leases to ascertain what action could be taken against lessees who have not developed their lands as promised. Ismail said the UDA is also setting up an Investment Promotion Division where investors will have access to all information and could make quick investment decisions." A local or foreign investor can either go to the Board of Investment or come to our investment division and we will take care of all their needs. We will reduce the red tape as much as possible in this process and, most importantly, have a land data base," he added. SEC
probes Richard Pieris share transactions The activity lead to speculation that UK-based Sri Lankan Dr. Sena Yaddehige may have lifted his effective stake in RPC to more than 50 percent, even though his direct holding remains below the 30 percent threshold at which take-over attempts must be announced to the market. Dr. Yaddehige is believed to have this week bought a 20 percent stake in Asia Capital Ltd (ACL), which owns about 24 percent of RPC. He is also said to have increased his controlling stake in RPC from 36 percent to 39 percent. However, market insiders said 12 percent of this holding is held through other companies, ensuring that Dr. Yaddehige does not breach the 30 percent limit. But just to confuse matters, Richard Pieris itself owns 25 percent of ACL. So what portion of RPC stock is held by Dr. Yaddehige? It's hard to say. Dr. Yaddehige was not available for comment. The Securities and Exchange Commission (SEC) is still collecting information in relation to the transactions. "We are looking at this issue as to whether the [companies] code has been broken," said SEC director general Dr. Dayanath Jayasuriya. "But it's a routine inquiry." But one thing that is clear is that RPC stock is now very tightly held. Brokers estimate that less than one percent of the company's shares is now up for grabs, ensuring that any further buying would force the stock to rise sharply. RPC shares closed on Friday at Rs. 140, up from Rs. 95.75 at the end of the previous week. Another certainty is that new found optimism among investors has seen the local share market surge in recent months. And just in case there was any doubt about the strength of the recovery, the CSE on Tuesday produced the figures to prove it: in the seven months since parliament was dissolved in October, the blue-chip Milanka index had risen 100 percent to 1218.7 points. Despite a correction on Friday, the index continued its ascent, ending the week at 1279.5 points. Apart from RPC, the rally was again underpinned by the banks, with Commercial Bank rising by Rs. 15 during the week to finish on Friday at Rs. 200. |
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