Alpha Airports Group Plc increased its investment in Sri Lanka duty free operator Orient Lanka Ltd., by 37 per cent, the Public Enterprise Reform Commission (PERC) said on Friday.

Alpha Airports, the UK-based multinational which paid 740 million rupees for the 37 per cent, first invested in Orient Lanka in May 1996 by buying a 60 per cent stake for one billion rupees when the enterprise was privatised by selling control to a strategic investor.

The 1996 privatisation agreement between Alpha and the Government of Sri Lanka included a put option under the Sale & Purchase Agreement, whereby the Government would sell the balance shares and the investor would purchase them at an agreed price.

Under the put option Alpha Airports paid 666.66 rupees a share for the 37 per cent stake on August 28, said PERC, the Government's privatisation arm.

"The option price is based on a clause in the agreement whereby the investor agree to purchase the shares at an agreed price, with a price premium of 10 per cent per annum,", said Mano Tittawella, director general of PERC.

As the option was exercised in the second year the Government was able to realise a 20 per cent premium on the original price of 555.55 rupees per 10-rupee share paid by Alpha Airports for 60 per cent of Orient Lanka's issued share capital of three million shares.

Shares amounting to three per cent of the issued capital were gifted to employees in October 1996.

Alpha Airports is a reputed multinational operating in Europe, USA and Australia through its main divisions of Alpha Retail, Alpha Flights Services and Dynair.

Orient Lanka, which operates a duty free at Bandaranaike International Airport, has the sole concession to market liquor, tobacco, confectionery and fragrances for a period of 10 years.