COLOMBO Aug 2 (Reuters) - Sri Lankan shares ended at a seven-week high on Tuesday, led by sharp gains in Distilleries Company of Sri Lanka PLC after the company announced a reorganisation of shares and stated capital.

The benchmark Colombo stock index ended up 1.45 percent at 6,503.30, its highest close since June 14.

Shares of Distilleries Company rose as much as 19.2 percent and touched their highest since Sept. 1, 2015, after the company said after market hours on Monday that investors would be allotted four shares of the new parent company for each share of Distilleries after the reorganisation.


Shares of Distilleries Company ended up 15.4 percent.

"In a 180-degree share swap, Melstacorp, which is a 100 percent-owned subsidiary of Distilleries Company, will become the holding company, while Distilleries Company will become a subsidiary of Melstacorp," the company said in a disclosure to the bourse.

"There was a lot of interest in Distilleries shares after the announcement. Most retailers believe the price of shares will be much higher than what it is now after the valuation," said Prashan Fernando, COO at Acuity Stockbrokers.

"It was an active retail investor market today."

Overseas investors were net buyers of 143.2 million rupees worth of shares on Tuesday, extending the net foreign inflow during the last five sessions to 725.7 million rupees worth of equities. However, they are net sellers of 4.08 billion rupees worth of shares so far this year.


Stockbrokers said the market is also awaiting an economic policy announcement from Prime Minister Ranil Wickremesinghe, scheduled for this month.

Turnover stood at 1 billion rupees ($6.86 million), more than this year's daily average of around 728.6 million rupees. Distilleries accounted for 26 percent of the day's turnover.

Shares in Conglomerate John Keells Holding Plc jumped 2.34 percent while biggest listed lender Commercial bank of Ceylon Plc rose 2.61 percent. ($1 = 145.7000 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Sunil Nair)