Colombo, Sri Lanka – 10 September 2026 – Agarapatana Plantations PLC (APPLC), a prominent player on the Colombo Stock Exchange (CSE), has announced a significant revision to the utilisation plan for funds raised during its Initial Public Offering (IPO). The company issued a circular to shareholders on September 9, 2026, detailing strategic changes aimed at bolstering its operational efficiency and long-term sustainability, primarily driven by evolving industry dynamics.
The shares of Agarapatana Plantations PLC were listed on the CSE on September 4, 2023, following an IPO that successfully raised LKR 747,630,999. The original prospectus outlined two primary objectives for these funds: LKR 672,630,999 for the purchase of modern equipment to develop “State of the Art – Processing Centres” (Objective 1) and LKR 75,000,000 for the settlement of high-cost term loans (Objective 2).
Strategic Re-evaluation Drives Fund Reallocation
While Objective 2 has been fully achieved, APPLC disclosed that only LKR 29,439,750 of the funds allocated for Objective 1 had been utilised by the stipulated timeline of March 31, 2025. The remaining balance of LKR 643,191,249 prompted a comprehensive re-evaluation by the Board of Directors, taking into account several critical developments:
- An unanticipated high rate of migration within the industry, necessitating a shift in strategy to combat worker shortages and address the decline in crop quality and processing efficiency.
- The imperative to transition from labour-intensive manual operations to mechanised processes, leveraging new available technology.
- The identified need for additional vital machinery, particularly driers and heaters, and an increased allocation for colour sorters to meet current trading conditions and market demand for orthodox leafy teas.
- The significant benefit of integrating renewable energy projects, promising higher guaranteed returns in the future.
Revised Investment Focus: Automation and Sustainability
Following this evaluation, the Board has resolved to re-prioritise the deployment of the remaining LKR 643,191,249. The revised plan sees certain equipment originally slated for purchase, such as de-stoners, energy savings fan units, and variable speed drive units, deferred, with their future acquisition to be funded through internally generated funds. The new allocation significantly boosts investment in key areas:
- Increased Automation: Funds for rollers, automation, and conveyorisation have been substantially increased from LKR 66 million to LKR 145 million, reflecting a strong push towards mechanisation.
- Quality Enhancement: Allocation for colour sorters sees a considerable rise from LKR 27 million to LKR 65 million, targeting improved tea quality in line with market demand.
- Critical Infrastructure: While funds for driers and heaters, generators, and batch weighers have been adjusted, they remain core components of the factory upgrades.
- New Green Initiative: A significant new allocation of LKR 88 million has been earmarked for the implementation of renewable energy projects, underscoring APPLC’s commitment to sustainability and energy efficiency.
The total revised allocation for these projects amounts to LKR 649,718,000. A shortfall of LKR 6,526,751 will be covered by the Company’s internally generated funds.
Extended Timeline and Shareholder Approval
Given that most of the new machinery will need to be imported, the Board has determined that an extended timeline until September 30, 2028, will be necessary for the successful implementation of these revised plans. This period will accommodate the selection of suppliers, importation, and installation processes, ensuring minimal disruption to ongoing operations.
To seek formal approval for these crucial changes to the IPO fund utilisation and the extended timeline, Agarapatana Plantations PLC will convene an Extraordinary General Meeting (EGM). The EGM is scheduled for October 2, 2026, at 10:00 a.m., and will be conducted virtually from 8-5/2, Leyden Bastian Road, York Arcade Building, Colombo 01.
Shareholders are urged to participate and consider passing a Special Resolution to ratify these strategic decisions. The Notice of Meeting, Form of Proxy, and Registration Form have been circulated to shareholders, with virtual meeting attendance details to be provided upon completion of registration. Queries from shareholders can be submitted to the Company Secretaries in advance of the meeting.
This revised strategy highlights Agarapatana Plantations PLC’s proactive approach to navigating industry challenges and its commitment to enhancing operational capabilities and embracing sustainable practices for long-term growth.
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