Stassen Group's Lanka Milk Foods (LMF) last week formally acquired 90% shares of Ambewella Livestock Company Ltd., and Pattipola Livestock Company Ltd., for Rs. 88 million. The deal was finalised early this year but the formal transaction had gone through only last week as per LMF's disclosure to the Colombo Stock Exchange. The sale of the two farms by the Government was under its privatisation program.

The Public Enterprises Reform Commission (PERC) said LMF was selected on the basis of its technical and financial capabilities and the proposal made. The purchase price for Ambewella was Rs. 46 million and for Pattipola it was Rs. 42 million. The previous owner of the farms was the National Livestock Development Board (NLDB).
As per LMF's Business Plan, LMF will further invest Rs. 70 million for Ambewella and Rs. 58 million for Pattipola for expansion in the short to medium-term.

Initially 11 parties had submitted Expressions of Interests to purchase the two livestock companies, out of which five parties were short listed to submit firm proposals. The other four parties were DAP Management Consulting, Kotmale Holdings Ltd., Malwatte Valley Plantations Ltd., and Newdale Dairies Ltd.
The Government is of the view that the development of the livestock sector will play a major role in the social and economic development of the country.

"The Government policy framework for the livestock sector provides for the expansion of the sub-sectors through the transformation of the subsistence oriented production process and the facilitation of the private sector to play a greater role in the activities of the livestock production, processing and marketing and supply of inputs and services," PERC said. As per Government's privatisation decision Ambewella's 880 acres of land and moveable assets and Pattipola's 545 acres and moveable assets will be transferred to LMF on a 50-year lease. As at end 1998, Ambewella's assets were valued at Rs. 7.7 million, leasehold rights at Rs. 191 million, goodwill on conversion at Rs. 19.1 million and current assets at Rs. 7.3 million. It has a share capital of Rs. 30 million. Current liabilities were Rs. 33.8 million and long-term and deferred liabilities were Rs. 161.3 million.

At Pattipola, the moveable assets were valued at Rs. 4.5 million, leasehold rights at Rs. 117 million, goodwill on conversion at Rs. 13.1 million and current assets at Rs. 10.1 million. Its current liabilities were Rs. 30.3 million and long-term and deferred liabilities were Rs. 104.6 million and issued share capital Rs. 10 million.