Expolanka plans delisting from CSE to focus on global growth

Diversified conglomerate Expolanka Holdings PLC yesterday announced its decision to delist from the Colombo Stock Exchange (CSE), a move which it said would help increase focus its expanding its operations internationally.

The proposal is subject to necessary shareholder sanction and regulatory approvals and clearances.

“We are confident that this proposal is in the best interest of our shareholders which provides an attractive and fair premium that will enable our minority shareholders to unlock value.

“As previously, post-delisting, the Company will continue to navigate market complexities in a fast-revolving business environment while continuing to drive sustainable growth as it strives to gain market share as one of the top-tier logistics companies in the world,” said Hanif Yusoof, Director, Expolanka Holdings PLC commenting on the move.

In a statement to the media, Expolanka Holdings shared that the challenging global macro environment and the accompanying geopolitical tensions have resulted in a significant bottleneck for the Group to continue with its expansion drive. It acknowledged that the recent financial performance of the company has been greatly impacted by these challenges and has consequently resulted in a period of earnings volatility.

Expolanka Group pointed out that given the earnings volatility in the recent past, EHL’s parent company has plans for EHL to focus on its core business and grow its international operations.

Therefore, the capital requirements for Expolanka Holdings will become increasingly international requiring it to raise capital from outside of Sri Lanka and in foreign currency, which borrowings would result in increased gearing and a high forex risk to the local minority shareholders, thereby impacting shareholder wealth.

Supported by capital infused by its parent company, SG Holdings Global Pte Ltd, as and when needed, Expolanka has grown amidst turbulent times. SG Holdings Global Pte Ltd, which made its initial investment in EHL in 2014, currently owns 82.43% of the shares of the Company.

Details of the exit offer as per a filing to the CSE

SG Holdings has intimated to the Board that it would be making an Exit Offer of Sri Rs.185.00 per share to all the other shareholders of the Company.

The exit offer reflects:

1. A Rs. 51.30 (88.4 percent) premium to the Volume Weighted Average Price over the last 3 months period ending 31 percent December 2023, a Rs. 45.20 (32.3 percent) premium to Volume Weighted Average Price over the last 6 months period ending 31 December 2023, and a Rs. 32.40 (21.2 percent) premium to Volume Weighted Average Price over the last 12 months period ending 31 December 2023.

2. A Rs. 8.80 (46.6 percent) premium to the lower of the Fair Price range and a Rs. 34.60 (23.0 percent) premium to the higher of the Fair Price range determined by the DCF Methodology in the aforementioned independent valuation; and

3. A Rs. 118.96 (180.1 percent) premium to the Net Asset Value of the Company as of 31™ December 2023.

Shareholders are advised to consider the following matters in deciding whether to accept the Exit Offer

1. SG Holdings Global Pte Ltd currently owns 82.43 percent of the shares of Expolanka Holdings PLC and does not envisage a further divestment of its stake. Consequently, only an insignificant minority stake of the Company is listed on the CSE.

2. H. Yusoof, the Chief Executive Officer of Expolanka Holdings PLC who owns 7.52 percent of the Company's shares has indicated that he will be accepting the exit offer. If Yusoof disposes of his shares to SG Holdings Global Pte Ltd, the public float of the Company will be reduced to less than 10 percent.

3. The Exit Offer described herein will provide minority shareholders who wish to sell their shares, an opportunity to do so at a fair value.

4. The Company will continue to comply with Sri Lanka's statutory reporting and compliance requirements and focus on delivering on its promise to the country and its people. As previously, the Company will navigate market complexities in a fast revolving business environment while continuing to drive sustainable growth as it strives to gain market share as one of the top-tier logistics companies in the world.