Sri Lanka’s RIL Property acquires 30-pct stake in United Motors Lanka

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Nov 13, 2017 (LBO) – RIL Property PLC announced on the Colombo Stock Exchange that it acquired a 30 percent stake in United Motors Lanka PLC from the latter’s major shareholder, M. A. Yaseen through a crossing at 2.36 billion rupees.

Acquisition of United Motors will strengthen RIL and its commercial property development activities, the Company said in a statement.

RIL has also received an undertaking from the major shareholder that he would not accept the Mandatory Offer once made by RIL.

However, in the event RIL fails to secure adequate accept ancesunder the Mandatory Offer by the minority shareholders, to ensure it holds 51 percent in UML; the major shareholder will facilitate this by divesting a further quantity of shares to RIL in order for RIL to hold a majority shareholding.

UML, established in 1945, is one of the oldest automobile companies in Sri Lanka with sole distributorships for a broad spectrum of automobiles brands including Mitsubishi, Fuso, TVS, Perodua, JMC, DFSK, MG, Brilliance and Zotye.

RIL owns a significant real estate portfolio of over 600 perches of prime property in Colombo 2 and is the owner, developer and manager of the “PARKLAND”, the 22 storey landmark Grade ‘A’ office building in Colombo 2 with a gross floor area of c. 450,000 sq. ft.RIL was listed on the CSE via a successful Initial Public Offering (IPO) in May2017 raising LKR 960 Mn from the public for its business expansion strategy, which is being pursued intently.

Hiroshini Fernando – CEO of RIL, commenting on the transaction, stated “The acquisition of UML further deepens our access to prime properties in Colombo and its suburbs and opens many more opportunities for long term real estate development. Post acquisition, the strength of UML’s core business operations and strong dividend track record, will also contribute to the overall strength of RIL Group.

In the meanwhile,RIL is steadily progressing towards using the funds raised through our recent IPO to achieve the objectives stated in the Prospectus, particularly the redevelopment of the “READYWEAR” Building. We are also actively pursuing the branch expansion strategy of the BreadTalk operation in line with our intended plans. ”

Additionally, UML has a strong presence in ancillary business verticals including repairs and services, motor spares and lubricants with access to over 2,000 dealers.

NDB Investment Bank acted as the transaction advisor to RIL whilst Nithya Partners acted as Legal Advisors to the transaction.