NDB structures First Ever Credit Card Securitization in Sri Lanka for Richard Pieris Distributors

21st January 2011, www.dailynews.lk

NDB Investment Bank (NDBIB) has structured the first ever credit card receivables securitization transaction in the Sri Lankan capital market on behalf of Richard Pieris Distributors Limited (RPD).

The transaction involved securitising future credit card receivables of the selected Arpico Super Market outlets to raise more than Rs 1.0 billion over a five year period.

NDB Group Investment Banking Cluster CEO Vajira Kulatilaka said “NDBIB, as in the past has been able to introduce another innovative product to the capital market through the securitization of Credit Card Receivables for RPD”.

NDB Investment Bank CEO Darshan Perera said “a lot of effort has been put in by the teams at NDBIB and RPD to make this transaction a reality and this product would be one of many products that would be introduced to the capital market in the near future.”

Richard Pieris Distributors Limited (RPD) operates the Arpico Super Market chain and the funds were raised to finance its retail expansions.

Popularity of supermarkets among modern day customers has been increasing in recent times due to the availability of a wide range of products, including groceries and general merchandise under one roof at an affordable price.

NDB Investment Bank Limited (NDBIB), acted as the structuring and placement agent to the transaction.

The funds were raised through several investors including a consortium of Banks and Unit Trusts.

National Development Bank PLC acted as the Escrow Agent.

Image: NDB Bank CEO Russel de Mel and RPC Chief Operating Officer Pravir Samarasinghe exchange agreements.

Richard Pieris to Build a Luxury Hotel in Colombo. Aims to Achieve Rs2.5bn Profit by Year End

21st December 2010, www.dailynews.lk, By Charumini de Silva

Richard Pieris Group has set targets to achieve a net profit of Rs 2.5 billion by the end of this year, while expecting to exceed the net profit Rs three billion in 2011, Richard Pieris Group Chairman Dr Sena Yaddehige told Daily News Business.

He said the group is planning on building a 100 room luxury hotel in Colombo.

The company is seeking a partner for this project. The group owns lands in Tangalle, Trincomalee, Kandy and Nuwara Eliya.

They are looking into possibilities of venturing into the leisure sector as the leisure industry has become a fast growing industry.

The restoration of peace has re-gained the confidence of doing business in Sri Lanka while passing the same feeling to the customers.

The green Arpico Supercentre is another step of the master plan and the company will provide over 1,000 job opportunities within the next 18 months along with their expansion programs.

"The introduction of the green concept helps to reduce cost, while passing the benefits of it to the customers. During the next two years the Group will create ways and means to go green as much as possible. Richard Pieris Group is promoting nano technology in saving energy in Sri Lanka as the cost of energy is high," Dr Yaddehige said.

Richard Pieris Group is expecting to take their footprint overseas with investments in Bangladesh, Papua New Guinea and Middle-Eastern countries.

The Chairman said Richard Pieris Group has three modules of business catering to all segments of society and is contributing to improve the rural livelihood.

With the continuous rain during the past few weeks the rubber prices recorded its highest ever increase. Due to the rain the demand and prices increased significantly. He said if the rain continues the prices will undoubtedly increase.

"Arpico Finance Ltd a subsidiary of the Richard Pieris Group also performed substantially well during the year. The company will enter the capital market once the Group finds that the stock market is on an upward trend. However, the company has no immediate intention of getting listed," Dr Yaddehige said.

Sri Lanka Supermarkets to Grow 20pct Annually on Increasing Consumer Purchasing Power

23rd November 2010, www.dailynews.lk, By Indunil Hewage

The supermarket trade in Sri Lanka is expected to grow 20 percent per annum in the years to come owing to increasing purchasing power of the consumers. It is expected that this growth would be apparent from the next year. Richard Pieris Group Director and Chief Operating Officer (COO) Pravir Samarasinghe said the retail market which consists of small boutiques will also record about three to five percent growth per annum in keeping with the Government’s objective to record seven to eight percent economic growth in the country.

The total proportion of the supermarket trade is 15 percent out of the retail industry in the country. The remaining percentage has been acquired by the general trade.

It is expected that the supermarket trade proportion will increase at an unprecedented rate in the future.

“Retaining in the supermarket trade in a profitable manner is a challenging task as it needs more expertise and financial stability to run the trade in a continuous manner,” Samarasinghe said. The prevailing stiff competition among the giant players in the supermarket trade has not attracted newcomers in the market.

In addition to that the high entry cost has also hampered their aspiration to enter the market.

“The Government efforts to double the per capita income in five years will also enhance disposable income of the people creating an impetus to bolster the supermarket trade,” Samarasinghe said.

“During the last couple of years many players who entered the supermarket trade were unable to sustain their ventures, as they were not privileged to enjoy the various advantages reaped by major players in the industry,” Samarasinghe said.

Sri Lanka's Richard Pieris to Enter Leisure Business. Business and Agriculture Tourism on the Cards

18th July 2010, www.nation.lk, By Indika Sakalasooriya

Sri Lanka’s plantation-rich Richard Pieris Company PLC (RPC) will shortly enter the leisure business aimed at developing five hotels, RPC’ Swiss based Chairman, Dr. Sena Yaddehige told The Bottom Line.

“If we have a joint-venture partner to come with us for the development cost we will go immediately in a big way. If not, we would go slowly. But definitely we will go into the leisure sector in the near future,” Dr. Yaddehige said. As he elaborated, RPC is looking at developing five hotels including one city hotel.

“We have earmarked four sites out of Colombo and one in the heart of Colombo which will be developed into a 100 room city hotel. The land and the building we are planning the hotel belongs to a friendly party. We expect to renovate the building and to build the hotel,” he remarked.

The investment for the city hotel alone is estimated at Rs.1.1 to 1.2 billion and RPC expects to fund the project though both internally generated funds as well as bank borrowings.

Yaddehige further said that at the moment RPC is in the process of obtaining approval for the hotel from relevant authorities and it has already got the nod from the Board of Investment (BoI).

“This hotel will be designed as a business hotel under the 3to 4 star category,” he added.

Asked about the other four sites where the conglomerate is planning to put up hotels without disclosing the exact locations, Yaddehige said that the group owns prime land almost everywhere in the country out of which a few are located in key tourist attractions.

“We have a 50 acre land in Tangalle between lagoon and the sea. And we have lands in Dambulla and Trincomalee. Now we are looking at the possibility of acquiring a land in Kalpitiya,” he said.

Touching on the type of hotels the firm intends building in the selected locations, he said, “the concept today is high margin top end hotels; then they have to be boutique hotels”.

RPC also expects to enter into agriculture tourism in the near future as the bungalows in the group’s plantations are now under renovation.

“We have very fine ten plantation bungalows. We even have one original bungalow designed by Geoffrey Bawa. We will be converting these into boutique hotels once our entrance to the leisure sector is sealed,” he said.

As to whether the group has the expertise in managing hotels, Yaddehige responded negatively, but said that there ‘won’t be a better time than this for us to intrude into the business given the country’s positive macro-economic outlook.’

Richard Pieiris Group is a diversified conglomerate with interests in plantation, retail, plastics and logistics. With a recent history of a nearly Rs.9 billion debt burden, the firm seems to be now in a recovering process with the buoyancy in the international commodity markets and coming down of interest rates locally.