Lankem group's Beruwala Resorts to raise Rs.336mn via private equity sale

Lankem group's leisure sector subsidiary, Beruwala Resorts Limited (BRL) plans to raise Rs.336 million through a private equity sale to expand capacity. In this regard, the company plans to sell 14 per cent of the issued capital or 84 million existing shares of the company, at Rs.4 each. The minimum subscription is 5, 000 shares (Rs.20, 000), the managers to the equity issue, Asha Phillip Securities Ltd said.

According to Asha Phillip, BRL is expanding its current revenue generating capacity of 75 rooms to 106 rooms from the beginning of FY2012/13, while constructing 30 new rooms within the year to reach 136 rooms count.

BRL operates The Palms, a four-star graded beach resort located in the southwest coast of Sri Lanka, on a land in extent of approximately 10 acres, in the world famous golden broad sandy beach stretch of Beruwala.

BRL acquired 55 per cent stake of BOT Hotel Services (Pvt) Ltd (BOT), the owner of Bay Beach Hotel, Weligama in FY2010/11 to fast track the aggressive growth plans of the company.

As per Asha Phillip, BRL is currently in negotiations to acquire the balance 45% of BOT during the next three months, in order to consolidate it as a fully owned subsidiary to enjoy the benefits of a unique location for tourism.

BRL’S financials showed that the company turned around in the FY2009/10 by recording a net profit of Rs.5.7 million. Further, the company together with its subsidiary BOT Hotel Services (Pvt) Ltd, recorded a post-tax profit of Rs.175.6 million for the FY2010/11.

BRL is a subsidiary of Colombo Fort Hotels Limited, which in turn is a subsidiary of Lankem Ceylon PLC. Other hotels involved with the company include Marawila Resorts PLC and Sigiriya Village Hotels PLC.

Lankem Ceylon PLC and its subsidiaries, Colombo Fort Hotels Ltd, Sigiriya Village Hotels PLC and Marawila Resorts PLC have a collective stake of 51.02% in BRL.