JKH announces repurchase of shares 

Amidst fears of a hostile takeover, John Keells Holdings PLC (JKH) in a disclosure to the Colombo Stock Exchange on Monday said that they will repurchase their shares from the market, pumping in Rs.11 billion for this purpose.

The statement said, "The board resolved to offer to repurchase One (1) out of every Twenty (20) ordinary voting shares at a price of Rs. 160 per share, dates of which will be notified in due course." This came on the back of businessman Harry Jayawardena-related parties who started buying this share during the past few months, increased their purchases when foreigners sold, this past month.

JKH is the only major listed company that does not have a controlling shareholder. The Captains family owns some 19 per cent while nearly 60 per cent of the shares are owned by foreign institutions. During the past month most of the foreign funds were selling this share. Over the past few weeks JKH has been responsible for the bulk of foreign buying and selling in the market. Through his holding company Melstacorp, Businessman Harry Jayawardena related parties already own a 3.5 per cent in the conglomerate and analysts noted that he is open to buy more.

The offer to repurchase shares reflects the view of the Board and management that the JKH share is currently not reflective of the value of the company and does not adequately represent the growth prospects of the company and therefore presents an opportunity for the company to repurchase its shares, the statement added. 

Last Friday JKH saw a net foreign selling of 3,958,050 shares.  Total shares traded in the company on Friday were 4,391,647 shares. These trades made JKH foreign ownership down to 51.1 per cent from 60 per cent earlier.  

The statement added, “the strength of the JKH Balance Sheet, along with existing cash reserves, is more than adequate to fund the company’s planned investment pipeline while retaining its track record of dividend payout.  With funding for the ongoing Cinnamon Life project fully secured, and funding in place for all planned investments across its core verticals over the next few years, JKH will continue to retain healthy cash reserves and the balance sheet flexibility, post the repurchase, to pursue further investment opportunities as they arise.” (DEC)