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Tuesday, August 17, 2010

Sri Lanka LOLC buys beach resort for Rs310mn

Aug 17, 2010 (LBO) - Sri Lanka's LOLC group has bought control of a beach resort on the west coast for 310 million rupees and is in talks with international chains to manage the property, a stock exchange filing said.

LOLC said it bought 6.2 million ordinary shares representing a 60 percent stake in Tropical Villas, a beach resort with 50 luxury villas in Beruwela, through a subsidiary LOLC Leisure.

Lanka Orix Leasing Company owns 70 percent of LOLC Leisure and Browns Investments 30 percent.

The statement described the acquisition by the LOLC group as "a strategic move to increase their presence in the hotel sector."

The controlling stake was owned by parties connected to the Jetwing group, a hotel firm, and the remaining 40 percent is held by the Hayleys conglomerate.

In May this year LOLC group entered the hotel sector by buying three hotels from the Confifi group; Palm Garden, Riverina and Eden, also in Beruwela.

"With the acquisition of a fourth hotel adjacent to these three hotels, LOLC leisure has now increased its footprint to over 25 acres of prime beach front land located on one of the best stretches of beach in the south of the country referred to as a 'Golden Mile'," it said.

"The company is now in a unique position to develop all the four hotel properties as a complex of beach hotels under one umbrella."

LOLC said it is holding talks with a "few world-renowned hotel chains" that have shown interest in establishing a partnership with the LOLC group to manage the hotels.

LOLC group is also looking for land on the east coast and doing studies to launch similar hotel projects, the statement said.

The group said it plans to make a "considerable investment" to expand its four hotels.

Sri Lanka's tourism sector is set for a boom with the end of the 30-year ethnic war in May 2009 which immediately led to an upturn in tourist arrivals.

The island is short of hotel rooms to accommodate the anticipated influx of visitors and most hotels are expanding or hotel companies setting up new resorts.

source - www.lbo.lk