Management baton passing on to Ravi Thambiayah’s daughters
One of the country’s best known and best-run family hotels, the 40-roomed Renuka Hotel well known for the Jaffna cuisine it offers at its Palmyrah Restaurant will be quoted on the Colombo Stock Exchange within the next couple of weeks.
The CSE announced last week that it had approved in principle the application submitted by Renuka Hotels Ltd., the owning company of the hotel by that name at Galle Road, Kollupitiya to list nearly 40.3 million of its ordinary voting shares by way of an introduction.
Although the introductory document has not been issued yet to broking firms, this would be done “shortly”, the CSE said.
Renuka which had 600,000 issued shares has increased this number without cost to its existing shareholders to 4.03 million shares and the number of shareholders too has increased from 60 to around 200 satisfying the listing requirements.
Although the company, founded by the late Mr. Alfred Thambiayah who owned the Cargo Boat Despatch Company (now Cargo Boat Development PLC) and was MP for Kayts, has remained unquoted, it floated a listed subsidiary, Renuka City Hotels PLC built on an adjoining property in which it holds a controlling 62.22% with Cargo Boat Development owning a further 6.51% and the associated Crescent Launderers and Dry Cleaners 2.63%.
Mr. Ravi Thambiayah who drove the original property as well as Renuka City and Cargo Boat Development to remarkable success, not only as a hotelier but also as owners of valuable quoted share portfolios, and is chairman of Renuka City has passed on the baton to his three daughters, Shibani, Arnila and Niruja who serve as Managing Directors of the group companies.
Analysts said that the family is not likely to sell down their present holdings in Renuka Hotels Ltd. and expected the newly listed share to trade at a minimum of Rs. 100 although there is a higher reference price.
Both Renuka and Renuka City which has 60 rooms are doing extremely well with their bottom lines reflecting not only hotel earnings but also other income arising from their share portfolios commanding a market value of over billion rupees each.
The last published annual report of Renuka City indicates a net profit of Rs. 380 million and occupancy of 82% for the year ended March 31, 2017. While Rs. 200.9 million came from hotel operations over Rs. 91 million came off dividends and share trading profits.
The Renuka City quoted share portfolio which includes several blue chips had a cost price of Rs. 934.4 million as at March 31, 2017 and a market value of Rs. 1.585 billion. The Renuka Hotels portfolio is even more valuable, analysts said.
The Renuka City share, offered on the CSE at Rs. 40 when the company was quoted traded between a high of Rs. 374 and a low of Rs. 270 closing at Rs. 294.50 at the close of the last financial year.