Rattled ETI buyers say reviewing steps to protect investments

• Say their next course of action will be based on CB’s officials position 
• US $ 14mn from the downsized US $ 70mn deal pending
• Charge they are subjected to unwarranted pressure and baseless accusations
• Affirm all payments so far done to acquire assets were through a reputed European bank

The buyers of ETI assets yesterday said they are presently reviewing the measures to be taken to protect their investments amid misleading statements by interested parties with misguided agendas pertaining to the acquisitions.

Ben Holdings Limited and Blue Summit Capital in an official statement said they have made payment up to US$54 million for the acquisition of ETI assets, and the pending amount stands at US $ 14 million.

The deal, which was earlier set at US $ 75 million, was downsized to US $ 70 million later following the omission of Swarnamahal Financial Services PLC from the transaction.  
“The board of directors of Ben Holdings Ltd and Blue Summit Capital are deeply concerned regarding the recent publication and broadcasting of false and misleading statements pertaining to the acquisition of ETI assets,” the statement noted.It further said the final US $ 16 million of the deal, which was remitted to Sri Lanka and ready for settlement as far back as November last year, was withdrawn as the transaction parties could not reach consensus on the valuation of the assets to be transferred under the final tranche, which consisted of several investment properties.

“Further, the prevailing environment at the time impacted the business confidence of the board, and hence the settlement was delayed and the funds were sent back to origin. 
“However, since then ETI directors have clarified their official position regarding the transaction and all preparations were made to settle the final tranche of US$16 million at the earliest,” the statement said.

The buyers stressed that all payments made to-date for ETI assets were subject to close scrutiny of the Central Bank of Sri Lanka (CBSL), and funds were settled through a reputed international top tier bank in Europe. 

“The investors of Ben Holdings and Blue Summit Capital therefore categorically deny all allegations levelled against them and are of the view that they have been subjected to unwarranted pressure and baseless accusations.

Against this backdrop, the board of directors of the investors is presently reviewing the steps to be taken to protect its investment in the properties business and would determine its course of action based on the official position of the CBSL, which is supervising the transaction,” the statement said.

“We want to take this opportunity to also clarify that the price quoted for these assets by CBSL was in US dollars. 

“We understand this was done to attract and boost Sri Lanka’s inflow of foreign direct investment. It is also notable that since our initial interest, the Sri Lankan rupee has depreciated by more than 20 percent and that if there was a local purchaser, they would have paid 20 percent in excess of what we paid due to this significant currency fluctuation,” the statement noted.
It further said both Ben Holdings Ltd and Blue Summit Capital are controlled by individuals of Sri Lankan origin, committed to the prosperity of their motherland and they have been unnecessarily targeted and victimized.  

“We therefore challenge those interested parties that are publishing and broadcasting false and misleading statements to come forward within 30 days and make a legitimate offer with proof of funds at the same equivalent value and cost of purchase including interest and all other related costs. The board would give due consideration to such a legitimate offer,” the statement said.

“Nevertheless the companies and its shareholders remain confident of the decision to invest in the former EAP companies, Swarnamahal (Pvt) Ltd, EAP Films & Theatres and EAP Broadcasting Limited and look forward to turn around the ailing businesses while building the future of more than 850 staff whose livelihoods are dependent on these establishments,” it added.