Lee Hedges to withdraw Rs2.8bn project amid shareholder concerns

Feb 27, 2017 (LBO) – Sri Lanka’s Lee Hedges is to reverse a resolution for a proposed multi-storied apartment after several shareholders requested that the company buys back their shares. Lee Hedges in a stock exchange filing said they received letters from eleven shareholders, collectively holding 2,763,900 shares, requesting that the company purchases their shares in view of their dissent to the resolution. At an extraordinary general meeting held on 26th January 2017, the company passed a resolution for an investment in a multi-storied residential service apartment building on Lot D of a land called ’Colpetty Mills’ at an estimated cost of 2.8 billion rupees. The said special resolution was passed with three-fourths (3/4) majority except one shareholder present in person and another shareholder present in person and by proxy representing six, voting against. The resolution however said they will proceed only in the event the performance of the real estate industry and economic climate of the country was conducive for such an investment. “The Board of Directors is of the view that it is in the best interest of the company that the company invests its time and expertise on maximizing the returns to the company with its existing investments,” Lee Hedges said. “Accordingly, we will not proceed to invest the said sum in Lot D of the land called 'Colpetty Mills' in the foreseeable future.” Lee Hedges said the Board of Directors have considered the status of the company’s present investment portfolio and further assessed the economic climate of the country in arriving at this decision. The Company is also to inform and seek shareholder approval for a new resolution to rescind the prior resolution that passed on 26th January 2017. Accordingly, an extraordinary general meeting will be held on 27th April 2017 for the purpose of passing a new resolution as a special resolution rescinding the prior one. The company, formally known as Shaw Wallace & Hedges are importers, agents and distributors of consumer goods, wines and spirits, pharmaceuticals and automative products. Lee Hedges also manufactures and export garments and food products.