By Sumaiya Rizvi
The director board of Galadari Hotel Lanka Plc has decided to restructure the hotel’s balance sheet by converting its debt amounting Rs.6.5 billion into equity, a stock exchange filing by the secretaries to the stock exchange said.
The director board of the company unanimously approved the decision as it will allow the hotel to benefit from the growing tourist industry and to operate competitively and profitably in the local hotel sector.
The hotel owes Rs.583 million to the National Insurance Trust Fund (NITF) and Rs 5.7 billion to Galadari Brothers Company (LLC).
The filing said, once relevant regulatory and shareholder approvals are obtained, a valuation of the Galadari shares will be conducted to determine the conversion price.
Last year, state-owned pension fund, Employee Provident Fund through a controversial deal purchased stake in loss making Galadari Hotel from one of its major shareholders, Nawaloka Hospitals which was desperately looking for an exit.
Deputy Chairman and CEO of Nawaloka Hospitals PLC Jayantha Dharmadasa in the Annual Report 2009/2010 has said that the disposal of approximately Rs. 1.4 billion worth of shares in Galadari Hotels Lanka Limited, reduced its financial burden.
“Nawaloka Hospitals does not have to take on any loss incurred by Galadari. This has provided us with great relief from a financial perspective.” he has further said.
source - www.dailymirror.lk
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