Colombo Land rises again as it becomes associate of Citrus Leisure Group’s Kalpitiya Beach Resort

Continuing to move the market as well as investor talk, Dilith Jayaweera-fame Citrus Leisure Group subsidiary Kalpitiya Beach Resort Ltd. converted the Colombo Land and Development (CLND) as an associate.

The development follows Kalpitiya Beach Resort Ltd. (KBRL) buying a 10% stake of 20.35 million shares in CLND for Rs. 896 million. The seller was Emagewise, which holds controlling stake in Citrus Leisure, which in turn owns a 72% stake in KBRL.

The latter had paid Rs. 44 per share in yesterday’s acquisition, whilst a few weeks ago it acquired 10% stake at Rs. 20 per share. This averages its overall cost to half of the current price of CLND.

The recent star in the market, CLND yesterday saw 67.6 million of its shares changing hands via 8,586 trades for Rs. 2.93 billion, thereby largely boosting the Colombo Bourse turnover to Rs. 5 billion. Retailers and high networth investors were actively trading CLND. Topping the list of gainers as well, CLND peaked to a high of Rs. 47.10 and a low of Rs. 38.50 before closing at Rs. 46.30, up by Rs. 8.40 or 22.16%.

Since the strategic buy of 20% by Emagewise and KBRL for Rs. 835 million from founding Singapore investors, who continue to own around a 30% stake still, the Urban Development Authority (UDA) owns a 17% stake.

Using some of the extra cash from yesterday’s sale, Emagewise picked up an estimated two million of Citrus Leisure Warrants for Rs. 70 million. Emagewise owns a 35% stake in Citrus Leisure.

Apart from KBRL, Citrus also has another subsidiary Waskaduwa Resorts Ltd., in which Vallibel One Ltd. owns a 20% stake. The two subsidiaries are on course to build two star class resorts in a bid to better tap the post-war boom in tourism.

Kalpitiya Beach Resort will have 150 rooms built at a cost of Rs. 1.9 billion in addition to self-funded 28 water front villas, which will be sold separately on 99-year lease. The Waskaduwa resort, which will also have 150 rooms, will see an investment of Rs. 1.9 billion. Both resorts are slated to be completed within 24 months.

In February in a further sign of booming confidence in the leisure sector as well as the promoters, Citrus Leisure Group completed a Rs. 923.5 million private placement to part equity finance the two four-star luxury resorts in Waskaduwa and Kalpitiya.

Citrus offered a 37.14% stake in the Waskaduwa venture and a 27.8% stake in Kalpitiya at Rs. 10 per share.

The private placements were part of the overall financing by Citrus, which late last year announced a multi-billion five year fund raiser inclusive of a Rights Issue backed by warrants exercisable in 2011, 2012 and 2015. The Issue was oversubscribed with shareholders subscribing for an additional 7.9 million shares, an oversubscription of six times for additional shares.

Citrus Leisure formally took over the management of Amaya Reef on 1 January 2011 and rebranded the resort as Citrus Hikkaduwa. It is now closed for refurbishment.

Dr. Godahewa new Chief; top architect Murad Ismail among new Directors of Colombo Land

Top professional and highly-connected official Dr. Nalaka Godahewa has been appointed as the Chairman of Colombo Land and Development Company Ltd., whilst a few other professionals have been inducted to the Board as well.

Godahewa is the Chairman of Sri Lanka Tourism, whilst he also serves on the Boards of the Urban Development Authority and Lanka Hospitals Corporation.

The appointment follows the resignation of R.R. Tudawe as Chairman as well as four other Directors, Ng Eng Ghee, Y.B.M. Rajandran, D.F.L.M. Perera and S. Karunanayake.

New appointees were Dilith Jayaweera, Director of Citrus Leisure Group, top architect Murad Ismail and top lawyer M.U.M.A. Sabry, whilst representing Singapore investors were Ng Yew Tong and Ng Yao Xing.

source - www.ft.lk