CL Synergy announces IPO to raise Rs.1.28bn

CL Synergy Directors at company premises

Leading freight forwarding solutions provider CL Synergy Limited has received the official approval from the Colombo Stock Exchange (CSE) for its initial public offering (IPO), which is set to open on April 7, 2022. 
The company will issue an offer for subscription of 63 million new ordinary voting shares and sale of 28.5 million existing ordinary voting shares, at an offer price of Rs.14.00 per share. 

Managed by Acuity Partners (Pvt.) Limited, the issue will offer a total of 91,500,000 shares to raise Rs.1,281,000,000 in funds. 

Prior to the IPO, the company will also host a virtual investor forum on March 24, 2022, extending its invitation to the public to participate in the informative session. Commenting on the IPO, CL Synergy Managing Director Roshan Silva stated, “With over 17 years in the freight forwarding industry, we have evolved into a holistic, end-to-end freight forwarding solutions provider with a strong presence in the local and international markets and have no intentions of slowing down. We work with an array of prestigious local and international clients across several export-oriented industries and we have built strong relationships with these customers by always going the extra mile. We are extremely pleased to present our IPO, as we gear up for the next stage in our strategy, further allowing us to onboard a wider group of stakeholders on our exciting journey to go above and beyond boundaries.”
The company expects to be listed on the Main Board of the CSE and would be a company representing the lucrative and vibrant logistics sector in the CSE, which is also declared an essential service sector by many governments globally, following the 
new developments. 

At the per-share price of Rs.14.00, the implied price-to-earnings ratio (PER) based on forecasted earnings for the upcoming financial year (FY23) stands at 4.6X. Reinforcing CL Synergy’s strong financial footing, 65 percent of the company’s revenue is exclusively generated in US dollars, whereas 70 percent of the revenue comes from the company’s export-oriented clientele. Furthermore, CL Synergy is an ideal candidate, which benefits from currency depreciation, as it has amassed a significant cash reserve and other assets denominated in US dollars. 

Explaining how the capital raised by the IPO will be deployed, Silva said, “As we embark on our ambitious plans, we intend to allocate approximately Rs.320 million to enhance working capital within CL Synergy, Rs.212 million to reduce long-term debt outstanding, Rs.200 million to expand our regional presence in buyer and sourcing markets and Rs.150 million towards strengthening our core digital systems such as the online rate and booking platform.”
Established in 2004, CL Synergy Limited is a fully-fledged freight forwarding company, which provides professional, reliable and high-quality services. The company prides itself on providing its customers with a personalised atmosphere, flexibility, highly competitive pricing and efficient servicing. CL Synergy has expanded its freight forwarding activities under a set of associate companies, which are also engaged in logistics and freight forwarding, along with other innovative ventures in the pipeline.