The statement from Mackwoods Plantations said it sold 15.2 million shares of Agalawatte Plantations or a 60.80% stake to Browns at Rs20 a share.
Agalawatte Plantations said falling commodity prices had made a "severe financial impact" and it was felt "prudent and timely" to sell out.
The full statement is reproduced below:
The controlling interest of Agalawatte Plantations PLC– a public quoted company - was sold this afternoon (14th July 2016).
As has also been widely reported, domestically and internationally, the global commodities crash in the past few years, the Russian Crisis and subsequent depreciation of the Rouble, reduced the buying power of Russia and CIS countries. This was further aggravated by the oil price crash, which reduced the buying power of the Middle East Countries, and in addition substantially impacted the rubber industry, as the falling oil price allows for synthetic rubber substitutes to replace natural rubber. This has aggravated the strain in particular for those plantations Companies with predominantly rubber exposure, including Agalawatte Plantations PLC.
The sale of 60.8 % of the shares of Agalawatte Plantations PLC held by Mackwoods Plantations (Pvt) Ltd. was auctioned on the trading floor of the Colombo Stock Exchange. The transaction was formally authorised and effected by the shareholders of Mackwoods Plantations (Pvt) Ltd. The shares, worth Rs. 304,000,000/-, were purchased by the Browns Group.
Given the severe financial impact of the commodities crisis on Agalawatte Plantations PLC, it was felt both prudent and timely to divest its shares to the Browns Group, which is already in the Plantation Sector of Sri Lanka.