Anilana Hotels & Properties Limited (AHAPL) Initial Public Offering

Transcription

1 Anilana Hotels & Properties Limited (AHAPL) Initial Public Offering AHAPL is the parent company of proposed hotel chain and it seeks the listing on Diri Savi Board by way of an IPO in order to raise funds to part finance 3 resort projects under phase -1 development. AHAPL has planned to construct 7 resort style hotels under its strategic development plan and 3 resort projects in Pasikuda, Nilaweli and Dambulla will be carried out under the Phase 1 and remaining 4 resort projects of, Panichchankerni, Selladiv Island, Vakarai and Trincomalee will be constructed under the Phase 2. In addition, AHAPL possess 2 properties in Kalkuda and Pasikuda for the investment purposes. The objective of the IPO is to part finance the ongoing Phase 1 developments of AHAPL. The proposed hotel chain targets high spending tourists from Europe as well as from Asian emerging markets and plans to be positioned as five star hotels. Pasikuka -This is the resort of AHAPL which has been commenced operations from March 2013 onwards. This resort comes under the Eastern Development Enterprises Private Limited, the fully own subsidiary of AHAPL and this is a 30 year leased 6 acres beach - front property with access to Pasikuda beach. The planed facilities of the IPO - AHAPL IPO Shares- 40 Mn shares will be initially issued and If the option exercises, further 40 Mn shares will be issued. (Total of 80 Mn Shares) Issue Price - LKR: 12/= IPO Value - Initially LKR 480Mn and up to LKR 960Mn, if the option is exercised Opening Date - 12 th June 2013 Closing Date- 1 st July 2013 or on the day that the Issue is oversubscribed Listing - Diri Savi Board Managers to the Issue - Nation Lanka Equities Ltd resort include 60 rooms including single & double & duplex chalets, lounge & swimming pools, restaurant & bars, open restaurant on the deck. Asha Phillip Securities Ltd Equity Research Division 1

2 Nilaweli This is the second resort which is expected to commence operations of AHAPL from July 2013 onwards with 70 rooms. This is located in about 20Km North-West of Trincomalee. Dambulla This property comes under Dambulla Hotel Resort & Country Club (Pvt) Ltd, the 51% owned subsidiary of South Asia Asset Management (Pvt) Ltd (The fully owned subsidiary of AHAPL) and balance 49% is directly owned by AHAPL. The property in extent 39 acres 2 roods and 5.25 perches. The planed facilities to be included are 35 rooms & 10 villas, agricultural zone and a horse riding schools. AHAPL expect to bring this resort also into the revenue generation stream from September 2013 onwards. Name of the property Development style Commencement Commencement of construction of operation Passikuda 60 Rooms Nilaveli 70 Rooms Dambulla 35 Rooms and 10 Villas Board of Directors Name Position Mr: Peter Amerasinghe Chairman Mr: Asanga Seneviratne Managing Director Mrs: Manjula Seneviratne Non-exe Director Mr: Gamini Wickramanayake Non-exe Director Mr: AjahnPunchihewa Non-exe Director Basis of Allotment Retail investors 16Mn shares will be allocated at the initial round and if the option is fully exercised, up to another 16Mn shares (Total 32Mn shares) Unit Trust - 4Mn shares will be allocated at the initial round and if the option is fully exercised, up to another 4Mn shares (Total 8Mn shares) Non- Retail investors -20Mn shares will be allocated at the initial round and if the option is fully exercised, up to another 20Mn shares (Total 40Mn) Objectives of the Issue Company expects to utilize IPO proceeds to part finance the Phase 1 Developments. The estimated cost for the Phase 1 is given below in Table 1. Table 2 demonstrates the formulated financing strategy of the Phase 1 development with the assumption of that Option would be fully exercised at the IPO. It is essential to note that debt portion required to finance this Phase 1 would be increased, if AHAPL could not able to exercise the Option or under-subscription of the Offer. In addition to the fund raising objective, AHAPL expects to widen the shareholder base and to enhance transparency of the company. Furthermore, AHAPL has estimated that all the direct and indirect cost related with the IPO would be LKR 10Mn and will be financed by proceeds from IPO. Asha Phillip Securities Ltd Equity Research Division 2

3 Estimated Cost Structure (Table 1) Name of the Property Total Cost (LKR Mn) Nilaveli 1,200 Passikuda 1,000 Dambulla 931 Other Cost 157 Total Development Cost 3,288 Financing the Project (Table 2) Description Total Cost (LKR Mn) Pre-Sale of Villas 450 Private Placement on 17 th Sep IPO Shares 480 Exercising the IPO Option 480 Debt 1,078 Total 3,288 AHAPL plans to sell proposed villas at Dambulla project in advance and expect to raise LKR 450Mn to part finance the Phase 1. In addition, AHAPL has carried out a private placement on 18 th Feb 2011 and 17 th Sep LKR 10/- per share. These shares will be locked for 9 months upon the trading commencement. Group Structure Anilana Hotels & Properties Ltd AHAPL (Company) Anilana Hotels & Properties Ltd AHAPL and Board of Investment (BOI) have entered into an agreement and Company has been granted a 15 year tax exemption period relating to the imposition payment and recovery of income tax in respect of the profits and income of the Company. The Nilaweli project Eastern Development Enterprises (Pvt) Ltd Vakarai Hotels (Pvt) Ltd 49% South Asia Asset Management (Pvt) Ltd Anilana Resorts (Pvt) Ltd East Wind Resorts (Pvt) Ltd directly comes under AHAPL. Eastern Development Enterprises (Pvt) Ltd (EDEPL) Fully owned subsidiary of AHAPL and Passikuda developments are Dambulla Hotel Resort & Country Club (Pvt) Ltd 51% Blue Lagoon Hotel Resort (Pvt) Ltd carried out under EDEPL. EDEPL has also received a 15 year tax exemption period Asha Phillip Securities Ltd Equity Research Division 3

4 In addition, all imports/ local purchases of project related items as approved by the BOI to be used for and by the Enterprise for the purpose of the Project shall be free of customs duty for a period of 18 months. Dambulla Hotel Resort and Country Club (Pvt) Ltd (DHR) Dambulla project has been implemented under DHR and granted tax exempted period will be 9 years under the BOI agreement. DHR shall qualify for determent or an exemption from the payment of Ports & Air ports Development Levy and project related items other than plant, machinery and equipment shall be exempted subject to some conditions by Secretary to Treasury. In addition,, all imports of local purchases of project related items as approved by the Board to be used for and by the Enterprise for the purpose of the Project shall be free of customs duty for a period of 18 months. Shareholding Structure Top 10 shareholders as at 11 th February 2013 Name No of Shares % Asanga Seneviratne 98,282, Asia Fort Asset Management 39,016, HSBC Intl 27,986,667 8 Harshith Dharmadasa 26,666,667 8 Manjula Seneviratne 20,000,000 6 Investor Access Equities 19,267,441 6 Pride Lands 15,114,667 4 Victor Ramanan 13,142,500 4 Anilana Collection (Pvt) Ltd 10,666,667 3 Otto Kalvo 9,857,109 3 Details of the locked- in and not locked-in shares upon the trading commencements Pre- IPO Shares No of Share % Locked- in Not locked-in Locked- in period Shares held by public 137,908, ,908,445-9 months from listing Shares held by nonpublic 191,432, ,432,655-9 months from listing category Further allotment 13,142, ,142, months from listing under public category Total Pre-IPO Shares 342,483, ,483,600 - IPO Shares with the assumption of 80,000, ,000,000 Option will be fully exercised Total Shares 422,483, ,483,600 80,000, ,483,600 shares (81%) will be locked for a period of 9 months from the date of listing whilst only 80,000,000 of IPO shares (19%) are available for secondary market trading for the first 9 months from the date of listing. Asha Phillip Securities Ltd Equity Research Division 4

5 Business, Financial & Trading Outlook Income Statement FY2011/12 FY2010/11 Revenue - - Other Income 30,724,503 3,174,425 Adminstration Expenses (84,775,995) (128,489,145) Business Promotion Expenses (3,945,202) - Finance Cost (871,414) (2,330,872) Revaluation Deficit (55,199,000) 0 Profit / (Loss) Before Taxation (114,067,108) (127,645,593) Income Tax Expenses (2,363,011) (237,241) Profit / (Loss) for the year (116,430,119) (127,882,834) Attributable to Equity Holders of the parent company (116,430,067) (127,882,778) Non Controlling Interest EPS (0.35) (1.85) Balance Sheet FY2011/12 FY2010/11 Non Current Assets 2,892,954,403 2,882,045,318 Long Term Investments 67,281,467 1,000,000 Currnt Assets 661,834, ,942,482 Total Assets 3,622,070,200 3,744,987,800 Total Equity 2,942,861,759 3,694,552,605 Non Current Liabilities 532,347,539 - Current Liabilities 146,860,901 50,435,195 Total Equity & Liabilities 3,622,070,200 3,744,987,800 Number of Shares 329,341, ,341,100 Net Asset Valuer per Share - Pre IPO Net Assets 2,942,860,718 IPO Proceeds If Minimum amount subscribed 480,000,000 If Option is excercised 480,000,000 Net Assets - Post IPO 3,902,860,718 Number of Shares - Post IPO 422,483,600 Net Asset Per Share - Post IPO 9.24 (without taking profit/loss of FY2012/13 into account) The Company has commenced to generate revenue from FY2013/14 onwards with the commencement of the commercial operations of their first resort of Passikudha. Further, the resort in Nilaveli will initiate businesses by July 2013 onwards whilst Dambulla hotel is planned to generate revenue towards the end of FY2013/14. Therefore, 135 rooms as a whole will add to the income generating stream by the end of FY2013/14. Given the Company s aggressive promotional efforts to position the Anilana brand name within the Sri Lanka s leisure industry with expertise of veteran hoteliers, it is expected that share will gain investor interest in both primary & secondary market. At the same time, the shares issued through the IPO (80 Milion Shares) are the only available shares in the market for the trading for the next 9 months from the date of listing whilst rest of the shares are locked for trading for next 9 months. This will hinder the risk of down ward movement of the share from its IPO price in the Secondary market. Asha Phillip Securities Ltd Equity Research Division 5

6 DISCLAIMER : This document has been prepared and issued by Asha Phillip Securities Ltd, on the basis of publicly available information, internally developed data and other sources believed to be reliable. While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct. Asha Phillip Securities Ltd, nor any Director, Officer or employee accept no liability whatsoever in respect of any errors or omissions. This document is a piece of economic/financial research and is not intended to constitute investment advice, nor to solicit dealing in securities or investments. Asha Phillip Securities Ltd may act as a Broker in the investments which are the subject of this document or related investments and may have acted upon or used the information contained in this document, or the research or analysis on which it is based, before its publication. Asha Phillip Securities Ltd, Its Directors, Officers or Employees may also have a position or be otherwise interested in the investments referred to in this document. This is not an offer to sell or buy the investments referred to in this document. Asha Phillip Securities Ltd Equity Research Division 6