June 09, 2008 (LBO) – Sri Lanka’s Horana Plantations, which is managed by the Ceylon Theatres group has capped management fees to 15 million rupees a year, the company said. In the second stage the estates were sold to managing agents. Despite gaining ownership, the management companies kept the fees and used them to finance borrowings.
Horana Plantations said its managing agent, Ceytea Plantation Management, charged a fee of 5 percent of profits before interest depreciation tax and amortization.
But for the three years from April 01 2008, the fee will be capped at 15 million rupees a year.
The ‘management fees’ are a legacy of Sri Lanka’s plantation privatization process where the firms were first given for third party management with the government remaining as the owner.