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Call for upward revision of Exit Offer
This is an open letter to the Chairman Bokuto Yamauchi and Chief Executive Officer Hanif Yusoof of Expolanka Holdings Pte Ltd., on delisting of shares.
The company Expolanka Holdings Pte Ltd made an announcement on 1st March 2024 of the board’s decision to delist the company from the Colombo Stock Exchange with a view to accommodate the international expansion of operations. I wish the company all the very best in their future endeavours.
However, let me state at the outset that the Exit Price of Rs.185 offered is far from satisfactory. The minority shareholders have invested their hard earned money in the company shares in view of the CEO’s impeccable name in the market & the reputation of the company.
Further, the investing public believed in the strength of the Japanese Directors and the parent company who are reliable as a country for their values & financial integrity.
I am surprised to hear that the CEO has agreed to accept the Exit Offer for his huge stake of 7.52 percent for reasons best known to him. The circular indicates that the principal company has indicated that the offer price is made at the request of the Board of the company after considerable deliberation and it constitutes a final Offer Price which will not be subject to further revision. It is felt that by inclusion of this clause a message is passed to all shareholders that it is compulsory for them to accept the company offer without any negotiations or counter proposals which is the usual case in instances of this nature.
A number of people have bought the company shares as long term investments in view of the massive futuristic investments made by the company, the tremendous potential in the group & the main line of freight forwarding business. In the past, when the share prices went up from Rs. 380 to Rs. 400 levels too the investors didn’t leave the market in view of the great confidence they had in company’s future prospects.
The company has invested bulk of its past profits on overseas expansion of the freight forwarding business and paid out a nominal amount as dividends. Further, once the company is listed in the Singapore Stock Exchange, the shares are expected to trade at premium prices.
It is felt that the company should not look at the current weak economic downturn in the country and decide on the Exit Price in view of the following.
The company bought back their own shares at Rs. 228 to Rs. 240 about 1 1/2 years ago by investing approximately Rs. 12 billion worth of dividends. This was a fillip to the investing public.
The country will receive the 3rd tranche of the IMF package soon which would help the market prices to stabilize.
The market interest rates are due to come down further compelling more investors to enter the market.
Had trading not been halted after the announcement it is expected for the shares to be traded at over Rs.180 by now.
This being an Election year a boom in the market is anticipated after the new government is elected
to office.
Hence the company is expected to do the pricing of the Exit Offer in fairness to the thousands of investors from a futuristic point of view.
It is impossible to agree with you that the Exit Offer represents Fair Value to the minority shareholders in view of above.
If the company decides to operate for a few more years in SriLanka, thousands of investors would be able to forego massive losses of their capital as a result of trusting the company to register unprecedented growth in profits due to the futuristic overseas expansions that have already been made.
Hence, I earnestly request the company and their parent company to make an upward revision of the Exit Offer taking into consideration the above, in the best interest of thousands of investors.
S. V. S. Fernando
Dehiwela.
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