CT Holding PLC, which controls retail giant Cargills, is raising a total of Rs 2.6 billion through a private placement and a rights issue with part of these funds going into a mega development in the Cargills property in Fort which would include an exclusive, upmarket hotel, market sources said.
Cargills officials including its Deputy Chairman Ranjit Page were not immediately available for comment but the sources said the funds from this capital infusion would be used for a development project at Cargills in Fort that would change the character of the area into a ‘touristic walkabout’.
The Cargills building was once the residence of the British Governor General of Ceylon.
Foreign partners involved in the projects were in Colombo this week to continue negotiations in the deal, and also met over dinner with local partners at a popular seaside restaurant, the sources said.
The company has been tight-lipped about the development owing to stringent Colombo Stockexchange rules about disclosure.
Mr Page in an interview with this newspaper in mid-2010 disclosed that the company planned to transform the 120 year-old Cargills bulding into a London-based, Harrods-type of building.
All the offices in the building were to be moved to a new location and the building vacated for this massive development, he was quoted as saying.
Some offices, the sources said, have moved ahead of the development.
The announcement by CT Holdings said that the company planned to raise Rs 2 billion from a private placement by issuing 9.6 million shares at Rs 210 each which was to be placed in three UK-based funds.
The company was also simultaneously planning to raise Rs 600 million by offering 3.0 million shares in a rights issue of 1-for-every-55 shares held at Rs 210 each.
It said the money will fund real estate and leisure projects and strengthen the balance sheet through the repayment of debt.
The market sources, monitoring developments at Cargills, said a subsidiary Millers Brewery Ltd was steaming ahead with the re-launch of 3 Coins beer.
The company purchased the brand and assets of McCallum Breweries Ltd last month and the sources said the brewery was being revamped in preparation for the re-launch of the product around end April.
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