VIDEO: HVA Foods Limited announces Rs. 319m IPO

HVA Foods Limited, one of Sri Lanka’s leaders in the manufacturing, marketing, distribution and exporting of tea based products, today announced its intention to raise Rs. 318,857,568 million from the public through an Initial Public Offering (IPO) of 30% of its stake.

Listing on the Dirisavi Board of the CSE, the company is offering 19,928,598 million ordinary voting shares of the company at the share offer price of Rs. 16 each. The Official opening of the IPO will be on the 12^th of January and will be kept open until 01^st of February unless fully subscribed before that. The minimum subscription has been set at 100 shares and thereon in multiples of 100 of shares applied.

Chairman of HVA Foods Rohan Fernando announced at the launch that the decision to list the company on the CSE was taken to achieve a few objectives; “The first allocation of LKR 45 million is for the acquisition of HVA Holdings (Private) Limited for the assignment of international brand rights of “HELADIV” to HVA Foods Limited - the transfer of 100% ownership of HVA Holdings (Private) Limited to HVA Foods Limited.  Hence, the acquisition will now give us total jurisdiction over the brand in Sri Lanka and worldwide covering the manufacture and export of “HELADIV” branded products without hindrance.  Moreover, infringement of the brand rights in any foreign country where the brand is registered will also now come under the control of HVA Foods Limited,” he explained.

Secondly, according to the Chairman, approximately LKR 95 million will be utilized to reduce gearing of the Company and another LKR 102 million will be utilized for the Ice Tea plant to be upgraded from a pilot plant to a commercial plant and for expansion of facilities in the existing factory. “As for the expansion of the existing factory, most of the current machines need backups and increased capacity. Our current tea bagging capacity is well below the required demand.  Therefore, approximately LKR 76 million will be utilized for expansion of the current operations,” he added. “The remaining balance will be utilized to finance the incremental working capital requirements of HVA Foods Limited - such as retiring expensive short term borrowings and to ensure smooth and efficient operations at the factory by maintaining adequate buffer stocks.”

Since its inception, HVA Group has won six Gold Awards as the Exporter of the Year in both traditional and non-traditional exports from Sri Lanka.  Identifying the need to create a tea brand with the uniqueness of its origins, HVA Foods Limited created its own brand, “HELADIV” in 1996.  “HELADIV” is derived from the word “Heladiva” which symbolizes a home grown product range and a name that could easily be identified with Ceylon tea.  The “HELADIV” brand is registered in 42 countries around the world and has also been the pioneers in developing Ready-To-Drink iced tea in the Sri Lankan market. “This is a very exciting year for Heladiv as we continue to get closer to our growing number of customers both in Sri Lanka and around the world, and we believe that the IPO is a unique opportunity for our customers and the wider investor community to get even closer to our brand,” stated the Chairman in conclusion. “We’re delighted at the level of interest and excitement that the IPO is generating here in Sri Lanka, and we are looking forward to welcoming new investors, retail and institutional alike, to the HVA family.”