Royal Ceramics Lanka Plc (RCL), which last week announced the exit from its commodity broking business, is expected to register a capital gain of Rs. 34.7m, a brokerage firm said. RCL said it had entered into an agreement with Lanka Commodity Brokers Limited to sell its entire stake of 51% in Asia Siyaka Commodities PLC (ASIY) where 132.6m ordinary voting shares would be transacted at a total consideration of Rs. 371.28m. The sale will take place in two phases according to SEC terms, where a 12.75% stake would be sold immediately after March 4, 2013 and the remaining 38.25% stake will be transacted after June 11, 2013.
RCL acquired ACIY, the fourth largest commodity broking house in the country which was a privately held company back then in April 2012 at a consideration of LKR336.6m.
“Thus RCL would receive a gain of Rs. 34.71m through this deal, even though the originally perceived synergies with other related companies did not materialize. During the period as a subsidiary of RCL, Asia Siyaka contributed Rs29.0m to its parent’s earning. However this divestment would benefit RCL going forward in streamlining the business and focusing more on core and related businesses”, TKS Securities noted in a company update.