AMW stock sold as capital infusion needed-Ajita de Zoysa

Associated Motorways Ltd, (AMW) Chairman Ajita de Zoysa told reporters on Monday afternoon that the decision for Associated Electrical Company (AEC) to sell its 51 percent stake in AMW to Dubai-based Al Futtaim Group was because of a need to raise capital.

“My uncle, Sir Cyril de Zoysa, who was a pioneering industrialist started this company which my father Mr. V.T. de Zoysa headed later on,” he said, touching on AMW history. He said this deal was entered into as the company needs large capital infusion to start the projects that the board has foreseen for the company. Earlier in another report this morning on TimesOnline, it was erroneously reported that Ajitha and Tilak de Zoysa, are sons of the founder Sir Cyril.

The new owner of AMW was introduced to the company by Dubai-based, Sri Lankan investor Alex Lovell.

“Mr. Alex Lovell introduced the Al Futtaim Group to me and on Saturday Mr. Bob Farrow (Senior General Manager- Business Development) from Al Futtaim offered to buy the AEC stake in AMW. I took board approval and then we decided to do the market transaction today,” he said.

Mr. De Zoysa said he will be retiring within three months and then his younger brother Mr. Tilak de Zoysa will take over the Chairmanship at AMW. However, Mr. Ajita de Zoysa will continue to be the Chairman at AEC.

After the 51 percent stake of the 59-year-old AMW Group was sold, John Keells Holdings’ (JKH) also disposed its 20 percent to the same party. Mr. Farrow said that after the AMW board had sanctioned the transaction, Al Futtaim had approached JKH. “Then they decided to sell,” he said. He said the AMW-JKH- James Finlay property development project that was announced some months ago will contine as Al Futtaim is also into property development.

This acquisition follows Al Futtaim’s recent control of Singapore’s retailer, the Robinson Group. A press release by AMW said that in line with the Takeovers and Mergers Code of the Colombo Stock Exchange the share offer will 'go unconditional' following official confirmation of acceptances above the 50 percent threshold.

When asked whether there were any depressing sentiments when ‘selling the De Zoysa heritage’, Mr. Ajita de Zoysa said, “There is no heritage or sentiment, but this is for the greater good of the company and the country at large in terms of investment.”

He said this is the second large foreign investment he has brought into the country during the last 18 months (Union Bank investors were the first) and that Sri Lanka’s investment potential is great. He said that Al Futtaim will set up a car assembling plant to manufacture cars for the local market as the prevailing tax structure makes it difficult to import cars.