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Wednesday, August 10, 2011

East West to inject US$ 80 m into 8 hotels

Ravi LADDUWAHETTY

Diversified blue chip East West, through a newly formed subsidiary- East West Hotel Developers (Pvt) Ltd will inject over US$ 80 million into eight star class properties, leveraging the dream run enjoyed by the leisure sector in a backdrop of durable peace.

The seven five star properties will be in Weligama Bay, Colombo, Kandy, Nuwara Eliya, the Cultural Triangle, Kandy, Hambantota and the East coast, top market sources told Daily News Business yesterday.

They also said that negotiations were also under way between East West and global leisure industry chains such as Hilton, Marriott, Intercontinental and Starwood along with some smaller chains which would also manage properties while leveraging their synergies in the industry.

The first of these hotels will be inside the Weligama Bay billed to be built and operated at a cost of US$ 24 million which be a 150 roomed property which will have a breathtaking and idyllic view of the sea.

The company has lodged the applications with the line agencies such as Sri Lanka Tourism and the Urban Development Authority and are awaiting approvals for the construction to begin in December.

The rest of the leisure projects will also be developed simultaneously and the East West Group will also shortly purchase properties for the other projects which will be countrywide.

The Group also is keen to have a Colombo City Hotel and strident in that light was Group Chairman Nahil Wijesuriya and related parties once holding the controlling interests of Hotel Services Ltd, the holding company of the Ceylon Continental, prior to its divestiture to Hayleys.

Market sources also said the majority of the equity will be coming from East West properties while there will also be a private placement.

The holding company of the East West Group- the Singapore based Asia 2000 owned by business tycoon Nahil Wijesuriya, who also owns East West, is expected to make a big impact in this regard.

The company also has Rs 1 billion raised through a Rights Issue recently.

source - www.dailynews.lk