Acquiring 12.7% in Blue Diamond Jewellery Worldwide Ltd. (Blue Diamond) by the Sri Lanka Insurance Corporation (SLIC) last week was a strategic move by the insurance giant as it has made plans to draw together other minority shareholders in a bid to resurect the company which has been in the red for sometime, according to SLIC officials.
SLIC paid Rs 104 million for this stake but the stock market analysts were surprised with the transaction as it is unusual for a state entity to buy such a ‘dud’ share.
SLIC officials however insisted that it was a collective decision by SLIC’s investment committee and there was a sound basis in buying this company. “We will get the other minority shareholders and make a strategic plan to revive this company,” an official told the Business Times. He added that SLIC believes in resurrecting falling (listed) firms.
But analysts speculated that this transaction was a politically motivated one, which the SLIC denied. |
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