Breaking Glass

The company on Monday also asked the Colombo Stock Exchange to suspend its shares for seven days beginning July 13 to facilitate the share split and issues of new shares.The monopoly glass maker’s major shareholder Gujarat Glass in March shed some 30% of its stake in Ceylon Glass to 54% as part of a book building process to fund fresh expansion.

The share split will increase its issued share capital from the current 55.4 million Rs. 10 shares to 554.2 million Rs. 1 shares if shareholders approve the proposal at the July 13 annual general meeting.

Industry analysts say the share split is also part of the book building process to raise form Rs. 771 million from the banking sector.

The monies will fund expansion of its niche market glass exports to markets including India, Australia and it final stage negotiations go well to Britain as well.

Company officials declined to comment on the share split and on expansion plans, sighting the up coming annual general meeting.

A statement issued by Ceylon Glass to the stock exchange said it had identified niche opportuni9ties in export market for low-volume, high margin bottles and thereby exploiting their capabilities to manufacture small batches.

Shares in the glass maker last traded at Rs. 34.00 on Monday, up Rs. 1.25 from Friday’s close.

The share is however trading below the Rs. 60.00 levels it traded at in mid March when the Indian parent Gujarat Glass cut back its stake from 84% to 54 %.

For the nine months ended Dec 31 2004, net profits topped Rs. 187 mn mainly due to the absence of an early retirement scheme.

During the financial year (FY) 2003/4, a voluntary retirement scheme to shed 300 workers cost the firm Rs. 83 mn. The annual employee cost savings that resulted were around Rs. 32 mn with the payback period being 2.5 years.

The glassmaker plans to shed a few more extra kilos during the fiscal year 2005/6 at an estimated VRS cost of Rs. 27 mn.