Sept 13, 2015 (LBO) – Employees of Hayleys PLC will benefit from the dissolution of its Employees’ Share Trust and hold shares worth around a billion rupees, an official said.
The trust was set up to fight a takeover bid by the Carsons Group, and according to the company, was allotted 2.4 million ordinary shares of 10 rupees each on 9th February, 1998 at the market price of 210 rupees per share.
Payment for the shares were made by the trustees from the proceeds of an interest-free loan of 504 million rupees granted by the Company.
In its recent annual report to March 2015, the company said in accordance with the circular from the Colombo Stock Exchange of February 2012, the company had to dissolve the trust.
“A part of the shares held in the share Trust was sold during the year and the sales proceeds were utilized to settle a part of the loan. The remaining shares in the Share Trust will be distributed among the eligible beneficiaries prior to the dissolution of the Trust,” the report said.
“The benefits of the dissolution accrue to the employees who hold Hayleys shares,” an official of Hayleys said.
Mohan Pandithage, the chairman of Hayleys, is believed to be one of the major beneficiaries of the dissolution.
The outstanding balance of the loan owed to the company, as of March 31st, was 148.5 million rupees. The market value of the shares held by the trust as of March 31st was 1.75 billion rupees.
The loan of 148.5 million rupees had been paid off, as of June 30th, and 5.6 million shares, or 7.48 percent of the company, was owned by the trustees of the share trust – the third biggest shareholders.
The market price of Hayleys shares was 333.50 rupees on Friday.
The group made a profit of 922 million rupees in the quarter to June, up 18 percent from the same period last year.