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Cargills group to form new real estate holding company

29 Oct 2021

By Shenal Fernando  Cargills (Ceylon) PLC (CCP) and its holdings company CT Holdings PLC (CTH) jointly announced, by way of a corporate disclosure yesterday (28), that the Board of Directors of both companies had resolved to transfer all property designated for development and equity in all unlisted real estate/property development subsidiaries of the group into a single subsidiary which serves as the property development arm of the group. The Board of Directors of both CCP and CTH had separately resolved on Monday (25) to carry out such a restricting process. Accordingly, CTH and CCP are to acquire equity in the new real estate subsidiary in the respective proportion of the value of the properties/equity holdings transferred, plus any stamp duty and direct taxes borne by each company. In addition, CTH is expected to invest an additional Rs. 550 million in the equity of the real estate subsidiary. This transfer process is expected to be affected at prevailing practicable market values and shall be completed within 3Q2021/22. The CCP and CTH hold significant property holdings either directly or indirectly through subsidiary companies. CCP has developed some of its property holdings into mini malls under the name Cargills Square, with the group’s Food City supermarkets, KFC quick-service restaurants, and Regal cinemas as anchor tenants. To date, CCP has developed three such mini malls in Jaffna, Gampaha, and Dematagoda, and work is ongoing at two other locations. Moreover, CTH has commenced the development of two of its cinema properties into mini malls in the same format as aforementioned. Currently the property development projects of the group are undertaken under different subsidiary companies. The group believes that this proposed restructuring of such developments and the group’s existing real estate sector under a single property holding company would allow the real estate sector to achieve scale and attract equity capital, if needed, for future property development projects.  


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