Sri Lanka shell company bought by Malaysian firm

Aug 20, 2010 (LBO) - Malaysia's Fly Asia has bought a 70 percent stake in Sri Lanka's Infrastructure Developers (IDL), essentially a loss-making shell company listed on the Colombo bourse, a stock exchange filing said. Fly Asia, an air transport company which operates air services and builds aerodromes, has made a mandatory offer for the remaining shares of Infrastructure Developers after acquiring 3.4 million shares of IDL at 13 rupees a share.

The seller of the controlling 70 percent was Pacific Far East Investments.

IDL, a company connected to the East West group, was in the business of renting out warehouses and property development.

But according to its March 2009 annual report, the latest available, it had ceased business in 2004 having sold its warehouses and employed no staff.

The company has made an operating loss of 109,293 rupees and has not received any income during the year, its auditors V.S. & Associates said.

The company has a negative working capital of 38.9 million rupees prompting the auditors to raise doubts whether it could continue as a going concern.