A subsidiary of Asia Capital PLC (ACAP) and an associate company of Richard Pieris Group, Asian Alliance Insurance Company PLC (AAIC) shares rose by 14.98% yesterday to a high of Rs.165 since June 6 high price of Rs.175. A total of 38,100 shares changed hands of AAIC whilst Asia Capital (ACAP) shares the major shareholder of the company also shot up by 13.85% to Rs.97.80 and closed at Rs.93.70 for the day.
Market sources said while the company is up for sale by the Malaysian Investor Dato Vijay Easwaran led Asia Capital (ACAP), there could be six prospective parties who may be eyeing to buy the company. Three of them are already into the insurance business. According to industry sources, one of them would be Harry Jayawardena led Distilleries (DIST) group as it has become cash rich after selling its Lanka Hospitals (LHCL) stake and receiving cash from state owned Sri Lanka Insurance as per Supreme Court directive on SLIC ownership’s reversal order in 2009. While Distilleries already has ventured in to Insurance via Continental Insurance, it is said that the party would HNB Assurance PLC (HASU), as the company had recently raised Rs.390.6 million from rights issue.
Meanwhile the other two probable parties are Prakash Schafter led Janashakthi Insurance (JINS) Group or Dhammika Perera led Vallibel One (VOL) Group as it has become post-war bullish acquiring a controlling stake in Delmege Forsyth in the midst of an upcoming company IPO.
Market sources feel it is heavily unlikely that an entity or group of companies already in to insurance business in the country may acquire any other insurance company. It may also not be Dhammika Perera led Vallibel One as Perera led Vallibel group earlier had nearly 18% stake in the company back in 2009.
After reaching a healthy balance sheet via raising funds through lately concluded IPO, Ashok Pathirage led Softlogic Holdings (SOFT) may also eyei the company whilst the recent post war bullish stock market investor Emagewise’s Dilith Jayweera may also be interested in Asian Alliance Insurance (AAIC) as he recently acquired several controlling stakes of Colombo Land (CLND), People’s Merchant Bank (PMB) and Panasian Power PLC (PAP).
Public shareholding of the Asian Alliance Insurance (AAIC) is said to be 1.66% as at 31 December 2010, whilst the issued capital stands at 37.5 million shares. Richard Pieris Group holds 25% stake in the company, according to financials whilst Dato Vijay Easwaran led Asia Capital and related parties have a 73% stake. It was reported that Asia Capital PLC, majority owners of Asian Alliance Insurance Company PLC (AAIC) is planning to sell its 73% stake for a sum of Rs.4.5 billion held through connected parties and exit the business.