Business

CL Synergy sets date for IPO 

CL Synergy Ltd. is set for its initial public offering (IPO) at the Colombo Stock Exchange (CSE) on 7 April 2022, the company stated, issuing a statement yesterday (21). 

The anticipated IPO by one of Sri Lanka’s freight forwarding solutions providers will issue an offer for subscription of 63 million new ordinary voting shares and sale of 28.5 million existing ordinary voting shares, at an offer price of Rs. 14 per share. 

Managed by Acuity Partners (Pvt.) Ltd., the issue will offer a total of 91,500,000 shares to raise Rs. 1,281,000,000 in funds. Prior to the IPO, the company will also host a virtual investor forum on Thursday (24), extending its invitation to the public to participate in the informative session. 

The company expects to be listed on the Main Board of the CSE and would be a company representing the lucrative and vibrant logistics sector in the CSE, which is also declared an essential service sector by many governments globally following the new developments. 

At the per-share price of Rs. 14, the implied price-to-earnings ratio (PER) based on forecasted earnings for the upcoming financial year (FY23) stands at 4.6X. Reinforcing CL Synergy’s strong financial footing, 65% of the company’s revenue is exclusively generated in US dollars (USD), whereas 70% of the revenue comes from the company’s export-oriented clientele. Furthermore, CL Synergy is an ideal candidate which benefits from currency depreciation, as it has amassed a significant cash reserve and other assets denominated in USD. 

Explaining how the capital raised by the IPO will be deployed, CL Synergy Managing Director Roshan Silva stated: “We intend to allocate approximately Rs. 320 million to enhance working capital within CL Synergy, Rs. 212 million to reduce long-term debt outstanding, Rs. 200 million to expand our regional presence in buyer and sourcing markets, and Rs. 150 million towards strengthening our core digital systems such as the online rate and booking platform.”

Established in 2004, CL Synergy Ltd. is a fully fledged freight forwarding company. CL Synergy has expanded its freight forwarding activities under a set of associate companies which are also engaged in logistics and freight forwarding, along with other ventures in the pipeline.