Swiss Firm Enters Food Industry Through Tess Agro.
Posted 15,September

By Chaveendra Dunuwille

In Local News

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IPEK S.A.Switzerland, a diversified group of companies involved in engineering, oil trading, and waste recycling, will enter the food industry, taking up a 33% stake in Tess Agro for LKR 84 million via a private placement.

Tess Agro, established in 1992 as Sri Lanka’s first cold chain operator, currently has a market capitalization of LKR 407.8 million, which is divided between 339.8 million voting shares and 50 million non-voting shares. As of the 30th of June, Tess Agro’s 2021 net asset value per share was recorded at 25 cents. This value had increased to 29 cents at the end of FY21.

IPEK’s private placement will be at 50 cents per share and at present, is awaiting approval from the Colombo Stock Exchange, the Securities and Exchange Commission, and the other shareholders of Tess Agro. According to IPEK, the proceeds from the private placement will be used to fund a tin manufacturing project with export in mind.

Yesterday Tess Agro witnessed 4.8 million of its shares change hands in 130 trades for a value of LKR 3.3 million. At day’s end, the share price was at 70 cents, a 16.7% increase.

FY21 saw Tess Agro’s turnover increase of LKR 6.2 million to 8.4 million. At the same time, the gross profit increased from LKR 0.17 million in FY20 to LKR 1.3 million in FY21. However, high administrative expenses resulted in a loss of LKR 5 million in FY21.