thank you for this very useful post AGM update
if what he disclosed is 100% truthful the statement "They are in the middle of acquiring an Insurance company", it would explain the sudden jump in ACAP and the staggering around of AAIC (RICH seems to own 25% of it already).
lets see how exactly this scenario turns out
Richard Pieris is in trouble after major wage rise in the Maskeliya plantation. Group is struggling to raise finance to fund working capital for plantation companies. It is very unlikely that Richard Pieris would be able to raise Rs 4bn to fund the acquisition of Asian Allinace. Only Time will tell us...
Can you please give detailed explanation as to how you arrived at following conclusions..with facts and figures please...
1. "Richard Pieris is in trouble after major wage rise in the Maskeliya plantation. Group is struggling to raise
finance to fund working capital for plantation companies."
2. "It is very unlikely that Richard Pieris would be able to raise Rs 4bn to fund the acquisition of Asian
No chairman is going to let his company down.. Especially the chairman of Richard Pieris. We all know about him little too well. Just talk to few of your friends at the Maskeliya Plantation, talk to company Bankers and to the stock brokers. They will tell you a story very differently to what few of you guys heard today.
Research and analysis of a company cannot be done by just going through statement of accounts or reading or listening to the chairmans statement in an annual report. It involves lot more hard work and effort much similar to inventing the pedal mechanism for automobile accelaration.
Only time will tell you the truth. Just like a palm tree which takes 6 year to give it's harvest!!!
It appears that there are lot of facts avalable with, but it had not been established by tabling the evidence. Hence, "Only time will tell you the truth" became a insufficient answer for the time for both questions asked (by nkalansu), as any one can give such an answer with or without facts.
True, TEA sector is affect the most by recent wage hike. But as we know RICH's plantation sector consist of KGAL (Rubber), NAMU (Oil palm), apart from MASK (Tea) and became the largest in all three planation crops. Wage-hike/Seasonality & fluctuation of revenue (prices and harvest) are common in plantation companies throughout.
Re-calling the last TEA rally, companies highly exposed to tea (Bagawanthalawa, Maskeliya) were on the top (if you can recall Stock prices - MASK/BOPL were on the top too)., while Rubber heavy Kegalle, Agalawatte were not much performed at that time, one time rupper prices was as low as LKR 60-75/Kg (compare it with last year prices). Then RUBBER rally started and companies haveyly exposed to Rubber (Kegalle, Kotagala, Kelaniyvelly) came on top in the list. May be RICH want to expose little bit more to Oilpalm as well.
Therefore it is good to maintain product mix like what RICH maintains. Therefore RICH is in a far better possition than peer plantation holding companies.
Apart from plantation RICH is in cach-rich Distribution/Supermarket business which is in aggressive expantion with unique SuperCenter concept. If you go any, you may see lot of private label (aprico) products which gives higher margins. Banks also has impressed by its way http://www.ft.lk/2011/01/21/ndb-inv-bank-strikes-first-ever-credit-card-receivables-securitisation-deal/
Their plastic sector gain decent return, though rubber/tyre sector affect by increased rubber prices. If rubber prices are gradually decreses loss of revenue in KGAL will be compansated by this sector. Also RICH have prime real estate properties in HydePark and Nawinna.
RICH entered to Stockbrokeing and (group) already has 25% stake in Asian Allance Insurance Co (AAIC). If RICH need take the control of AAIC has to buy at least another 25% (on current price of 138.90, it will cost at least
1,301 million) Why RICH want 4B for this ?? If they want to gain controlling of AAIC, it won't be soo difficult to find about 1.5 B., as Dr.Y and ARPICO have maintained their own respect.