Browns Investments Ltd. goes for mega private placement deal

Browns Investment Private Limited, a joint venture between Brown & Company PLC (BRWN) and Traprobane Holdings Private Limietd has recently raised Rs.1.5 billion in a private placement deal and its second phase which is now being concluded has been oversubscribed.

According to sources the private placement was done in two phases-offering 300 million shares at the first phase in December 2010 and another 200 million shares in January 2011.

Browns Investments Limited is expected to go public in the first quarter of this year and the funds raised by these two private placement deals and the public issue of shares will be utilized to further expand the company's investments in the hotel and leisure sector as well as in portfolio investments.

According to sources Browns Investments, which in a way resembles business magnate Dhammika Perera's Valllible One, has investments in various sectors including power generation, plantation, property and construction and hotels.

It is learnt that Browns Investments has significant investments in the hotels and leisure sectors via LOLC group amounting to Rs.400 million and plantation investments via Free Lanka Capital Holdings (FLCH) amounting over Rs.500 million.

Browns Investments is believed to have investments in Pussellawa Plantations Ltd and Maturata Plantations Ltd (MPL) through its investments in FLCH.

FLCH is believed to go for Rs.1.5 billion IPO in the latter part of the first quarter, probably March, according to sources.

When it comes to leisure, Browns Investments has a 30% holding in LOLC leisure Pvt Ltd., the leisure arm of the LOLC group. LOLC leisure owns former Furkhan family properties including Rivirina, Palm Garden and Eden as well as the Boutique hotel tropical villas.

LOLC Leisure is currently carrying out a major refurbishment and upgrading of these properties and is believed to be seeking to go public, thus presumably giving an exit route with capital gain to Browns Investments.

Browns Investments has also acquired 841 perches of beach front propertt in Kosgoda and plans are afoot to build a three star hotel of 150 rooms on the property. Also FLCH plans to renovate and convert two estate bungalows at scenic locations on their estates into boutique hotels.

Entering the construction sector Browns Investments in partnership with LOLC acquired a 20 percent stake in Sierra Construction Private limited in November 2010.

Yesterday in a stock exchange disclosure LOLC officially informed the Colombo Stock Exchange its entrance to the construction sector with a further acquisition of 20 percent of Sierra Holdings Private Limited which holds 60 percent stake in Sierra construction Limited.

"The total investment for LOLC and Browns to acquire these shares were Rs.1.6 billion" the disclosure said.

Sierra Holding Private Limited also holds controlling stakes in Sierra Cables and Agstar Fertilizer Private Limited. According to sources following this acquisition Browns Investments holds nearly 25 percent of the Agstar Fertilizer. It is believed that with the acquisition of shares in Agsatar, Browns Investments will go into agriculture sector as well.

It is also learnt that with the entry to the construction sector, LOLC and Browns Investment plan to build and operate a commercial office complex in Colombo 08 with 80,000 square feet on rentable place.

Daily Mirror

Shouldn't BRWN, as a listed company, make a disclosure re: this private placement?

And shouldn't the regulator, i.e. the CSE, have immediately demanded prompt disclosure in view of its potential impact on investor perception?

another interesting IPO isn't it??