July 26, Colombo: Singapore-based Parkson Retail Asia Ltd has agreed to purchase a controlling stake of Sri Lankan fashion retailer ODEL, the retailer announced today.

Parkson will purchase a 41.8 percent stake in ODEL for Rs 1.4 billion according to a Share sale and Purchase agreement signed by the two companies, ODEL announced in a a notice to Colombo Stock Exchange (CSE) today.

The transaction would be followed by a mandatory offer to minority shareholders and a 1 for 1 Rights Issue that will raise about 2.9 billion rupees in capital for the company's future investments in retail spaces.

"Parkson has entered in to a Share Sale and Purchase Agreement with the controlling shareholders of ODEL, - the company's founder and CEO Otara Gunewardene and her brothers Ajit and Ruchi Gunewardene - to acquire 60,625,000 shares of ODEL, representing 27.88 per cent, 13.6 per cent and 0.34 per cent respectively of the issued share capital of the company at Rs 23.50 per share," the 22- year old fashion retailer said.

Following the acquisition, Ms Gunewardene will retain a 27.88 percent stake in ODEL PLC and will continue to be the company's CEO, it said.

In July 2010, ODEL became the first fashion retail business to be listed on the Colombo Stock Exchange with an IPO of 16.7 million shares, an 11.52 percent stake in its equity.