LOLC Group is set to make a Rs. 3 billion takeover bid for Sierra Cables following the acquisition of a 30% stake in the company. The move comes after Browns Investments PLC, the strategic arm of LOLC Group, through its wholly owned subsidiary Iconic Trust Ltd., purchased 6.65 million shares of Sierra Cables at Rs. 8 per share, totaling Rs. 53.3 million.
As a result of this transaction, Iconic Trust increased its stake in Sierra Cables to 30.42%, triggering the Securities and Exchange Commission’s (SEC) Takeovers and Mergers Code. Browns Investments has confirmed plans to make a mandatory offer to minority shareholders.
As of 30 June 2024, Iconic Trust held 156.8 million shares, representing a 29.18% stake in Sierra Cables, which has a total of 537.512 million shares. Other key shareholders include Sierra Holdings Ltd., with a 26.67% stake, and Almas Holdings, which holds 26%. The remaining 42.76% of the company’s shares are publicly held by 20,542 shareholders.
In the second quarter of 2024, Sierra Cables’ share prices fluctuated between a high of Rs. 12.30 and a low of Rs. 10.50, closing at Rs. 11.20. The company’s net asset value per share stands at Rs. 9.66.
Sierra Group operates across six major business sectors, including construction and engineering, consumer electronics, cables, leisure, property development, and fertilizer. In the first quarter of FY25, the group’s revenue dipped by 7% to Rs. 1.7 billion, with operating profit falling by 40% to Rs. 255 million. Pre-tax profit dropped by 22% to Rs. 260 million, while after-tax profit fell by 15% to Rs. 186.4 million. For the full fiscal year 2024, Sierra Cables reported revenue of Rs. 8.15 billion and an after-tax profit of Rs. 727.7 million, compared to Rs. 703 million in FY23.