Al-Futtaim buys 71% stake in Sri Lankan vehicle firm

NEW STAKE: Al-Futtaim has bought a stake of more than 71 percent in a Sri Lankan motor vehicle company. (Getty Images)

Dubai-based engineering firm Al-Futtaim bought a stake of more than 71 percent in a Sri Lankan motor vehicle company, Associated Motorways, on Monday, analysts said.

Associated Motorways is the sole agents for Nissan vehicles and Yamaha motor cycles in Sri Lanka.

"Over 71 percent of the Associated Motorways shares held by two companies were sold to Dubai based Al-Futtaim at 174.50 rupees a share," Geeth Balasuriya, assistant research manager at HNB Stockbrokers, told Reuters.

"John Keells Holdings sold its 20 percent holding in Associated Motorways while Associated Electrical Corporation sold a stake of around 51 percent in the motor company."

Both sellers officially announced the sale to the stock exchange after trade in Associated Motorways, John Keells Holdings, and Associated Electrical Corporation was halted temporarily, according to exchange procedures.

Associated Electrical Corporation said it had sold 28.46 million shares, comprising a 51.15 percent stake in Associated Motorways, at 174.50 rupees a share to Al-Futtaim Engineering LLC.

Diversified conglomerate John Keells Holdings, meanwhile, said it had divested its 20 percent stake in Associated Motorways and the capital gain for the company would be around 1.03 billion rupees.

The Dubai based company's legal firm confirmed the purchase of a 71.15 percent stake in Associated Motoways at 174.50 rupees a share, with the total consideration amounting to 6.91 billion rupees ($64.2 million).

By 06:30 GMT, Associated Motorways stock was up 2.65 percent at 174.50 rupees calculated on a weighted average basis, while Associated Electrical Corporation shares were 1.6 percent firmer at 1,674 rupees.

Shares in John Keells Holdings, which hit a 2-½ year low on Tuesday after a Supreme Court ruling nullified a five-year tax concession for one of its subsidiaries, were 3 percent firmer at 103 rupees and the bourse was 0.69 percent up. ($1=107.615 rupees) (Reuters)

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