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Tuesday, June 14, 2011

LOLC Leisure goes for Rs 2.5 billion refurbishment

Ravi Ladduwahetty

LOLC Leisure will undertake an ambitious Rs 2.5 billion refurbishment programme for its three southern coastal belt hotels -Club Palm Garden, Riverina and Tropical Villas bringing them to international standards.

“These three hotels will be upgraded to reach international standards and we are targeting these three hotels to be the best resort properties in Sri Lanka”, LOLC Group Managing Director and CEO Kapila Jayawardena told Daily News Business yesterday.

The company is also now at an advanced discussion stage with a frontline Thai firm of architects to coordinate the full refurbishment programme which will see the total revamp of the hotel, billed to be completed in eighteen months.

The existing structure will remain intact but there will be substantial value additions to the rooms, restaurants and the kitchens of these three hotels.

The three hotels have been closed down for one and half years from May 1 to refurbish and modernize the properties. After being upgraded, the hotels will be managed by a globally reputed hotel management company and a global hotel chain operator.

“We are in discussions with Hilton, Marriott, Meridien and Six Senses chains and will announce the operator that we are going to tie up with shortly,” he said.

Market sources were agog last week of a Rights Issue and a Private Placement to fund the refurbishment. The entire 7.3 acres land owned by Confifi’s Club Palm Garden (PALM) alone is now valued at nearly Rs 450,000 per perch, and the existing 140 rooms alone are valued at nearly Rs 12 million each.

Accordingly, the share is valued at a price of around Rs 450.

However, Jayawardena said that nothing has been decided yet at this stage on a Right Issue or a Private Placement
.
Jayawardena said LOLC will revalue the properties spanning 22 acres which have not been revalued so far and that will be after the refurbishment.

LOLC in May 2010, bought Confifi Group’s 70 percent with Browns Investments, in two deals valued at over Rs 900 million, in which LOLC bought 3.1 million shares or 43.3 percent Confifi Hotel Holdings at Rs 210 per share.

Browns Investments has a 30 percent stake. Confifi Hotel Holdings further owns a 21.8 percent of Eden Hotel Lanka and 24.06 percent of Riverina Hotels, both listed firms.

LOLC Leisure which now owns the leisure properties has over 22 acres with 500 rooms of prime beach front land located on one of the best stretches of beach in the ‘Golden Mile’.
source - www.dailynews.lk