The Sri Lankan stock market welcomed its third entrant for 2018 on Friday as Hatton Plantations PLC (HPL), a subsidiary of Sunshine Holdings PLC entered the bourse by listing its shares by way of an introduction.
The listing of 236.67 million Ordinary Voting Shares of HPL on the Diri Savi Board of the CSE under the ‘Plantations’ sector is the third listing of a company under the Sunshine Holdings umbrella. HPL was incorporated in October last year through the segregation of the tea business of Watawala Plantations Plc.
“The objective of the listing is to ensure proper governance and we believe it will benefit shareholders by fetching them a better share. As the shareholders of Watawala will get the same mirroring shares, they will be benefited,” HPL Chief Executive Officer, Binesh Pananwala said.
Speaking to the Business Observer at the bell ringing ceremony hosted by the CSE to mark the commencement of trading of HPL shares, Panawala said the rationale behind spinning off the tea business segment into a separate company will enhance focus and supervision in its core business operation.
Meanwhile, HPL Chairman Sunil Wijesinha stated that the listing and segregation has resulted in a new opportunity for the company to formulate strategies and offer greater emphasis and focus to the tea plantations under the Sunshine Group. Also speaking at the ceremony, CSE Chairman, Ray Abeywardena said that he was confident that HPL’s listing will bring about new avenues through which both the company and shareholders could mutually benefit.
On the other hand, commenting on the overall sentiment of the capital market Abeywardena noted that although performance has been dampened during the past few weeks, he is confident that market will gain momentum following the elections.
“We perceive that the current lull in the market is only due to the elections and due to the uncertainty surrounding it. People are taking a ‘wait and see’ approach to know the outcome of it,” Abeywardena said.
Incorporated in September 2017, HPL was formed as part of the Arrangement proceedings carried out by Watawala Plantations PLC (WATA). The proceedings required the vesting of the operational assets and liabilities of the upcountry tea business segment of WATA to HPL on September 30, 2017. Accordingly, HPL was issued shares mirroring the shareholding of WATA as at end of day trading on September 29, 2017. HPL owns 17 tea estates which are spread across Watawala, Lindula and Hatton regions while its total mature plantation extent amounts to 3,827 hectares.