UPDATED - Hayleys buys Singer's local unit in near Rs. 11 bln deal

Hayleys PLC, in a stunning annoouncement on Wednesday to Sri Lanka’s business world, declared that it had acquired Singer Sri Lanka, purchasing a controlling stake in the local consumer retail. This would be the Dhammika Perera-led Colombo conglomerate's biggest foray in the retail market and enhances its share of this lucrative market..

Group chairman Mohan Pandithage said the company paid Rs 47 per share for 231.8 million shares totalling Rs.10.89 billion which is 61.73 per cent of Singer while entering into another agreement to purchase another 9.47 per cent (35 million shares) in 12 to 15 months, The agreements were with Singer Sri Lanka's major shareholder Retail Holdings (Sri Lanka) BV which held this 71 per cent stake.

Singer Sri Lanka in a separate announcement on the transaction said the buyer, Hayleys would now have to make a mandatory offer to buy the balance shares as per stock market rules.

The globa retaill company had earlier sold its entire 70.28 per cent equity stake in subsidiary, Singer Pakistan Ltd last year and in the prior year, it sold 40 per cent stake in Singer Thailand to Thai investors.  
The Colombo Stock Exchange (CSE) halted trading in both companies at the start of trading on Wednesday pending clarification over speculation in the market. The officials said there will be an announcement later on Wednesday after trading. 

Sources said this is the first major deal by Mr. Perera after he parted company with his ‘right hand man’, Nimal Perera in early March. The duo, led by Dhammika Perera, was widely credited for unconventional forays into powerful businesses culminating with the virtual take-over of the Hayleys Group. Their last big acquisition was Delmege. 

The Singer Group revenue in the first half of 2017 increased by 13.6 per cent to Rs. 25.1 billion, compared to the same period last year. There was strong growth in certain product categories such as, smart phones up by 46 per cent, bottle coolers and deep freezers by 32 per cent, televisions by 22 per cent, media pads and tabs by15 per cent and furniture by 14 per cent.

In the consumer durables market that Singer is present is more susceptible to market conditions than others. When customer income increases, the demand for consumer durables is above that of the general market demand and when customer income decreases the demand for consumer durables is below that of general market demand. (Duruthu)