Sri Lanka to di­vest lux­ury ho­tel firms af­ter port sale

Kuwait Times - - BUSINESS -

Sri Lanka yes­ter­day an­nounced plans to sell off two state-owned lux­ury ho­tel com­pa­nies fol­low­ing its bil­lion-dol­lar pri­va­ti­za­tion of a loss­mak­ing port.

Gov­ern­ment spokesman Ra­jitha Se­naratne said min­is­ters ap­proved the seek­ing of bids for a 51 per­cent stake in Ho­tel De­vel­op­ers (Lanka) plc, whose lux­ury ho­tel in Colombo is man­aged by Hil­ton.

He did not give a value for the com­pany, which oc­cu­pies prime land in the heart of Colombo. The gov­ern­ment will also sell all of Can­will Hold­ings (Pvt) Lim­ited, which owns a 49-floor build­ing that will op­er­ate as Grand Hy­att Colombo once con­struc­tion is com­pleted.

Can­will is cur­rently in­cor­po­rated as a pri­vate com­pany, but its eq­uity is held by three state en­ti­ties-the coun­try’s main in­sur­ance com­pany and its sub­sidiary and the main pen­sion fund.

Last year the in­sur­ance com­pany val­ued the ho­tel prop­erty at over $240 mil­lion. The lat­est an­nounce­ment came four days af­ter the gov­ern­ment sealed a $1.12 bil­lion deal to let a Chi­nese state firm take over the south­ern port of Ham­ban­tota. The loss-mak­ing port strad­dles the world’s busiest east-west ship­ping route. It will now be jointly man­aged by the state-owned Sri Lanka Port Author­ity and China Mer­chants Port Hold­ings.

Sri Lanka has said it wants to re­duce its crip­pling for­eign debt with the pro­ceeds of the Ham­ban­tota port deal, and is sell­ing off some other en­ter­prises to raise rev­enue.

In­ter­na­tional rat­ings agency Moody’s has said the port deal was credit-pos­i­tive for Sri Lanka and could help the is­land re­duce its debt ser­vic­ing and build for­eign re­serves.

Colombo’s plans to sell its white ele­phant na­tional car­rier, Sri Lankan air­lines, has stalled due to lack of in­vestor in­ter­est. Sri Lanka se­cured a $1.5 bil­lion bailout from the IMF last year af­ter fac­ing a bal­ance of pay­ments cri­sis.

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