Monday, 24 March 2014 01:30
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70% stake in LOLC Leisure transferred for Rs. 2.8 b
Group subsidiary now one of the largest in leisure with nearly 1,000 rooms
As part of the on-going business reorganisation, LOLC has divested its direct exposure in leisure to group subsidiary Browns Investments PLC (BIL) which has now become one of the largest players in the hospitality industry commanding nearly 1,000 rooms.
LOLC has divested 70% stake in LOLC Leisure to previously minority shareholder BIL for Rs. 2.8 billion. This has made LOLC Leisure a 100% subsidiary of BIL.
LOLC Deputy Chairman and Executive Chairman/Director Browns Investments Ishara Nanayakkara
LOLC Leisure is the controlling shareholder of Palm Garden Hotels PLC, Eden Hotel Lanka PLC, Dickwella Resorts Ltd., Tropical Villas Ltd., and Riverina Resorts Ltd. BIL is the controlling shareholder of Green Paradise Resort Ltd., Samudra Beach Resorts Ltd., and Sun and Fun Resorts Ltd.
“With this acquisition BIL will become one of the largest leisure sector operators in the country having nearly 1,000 rooms under its management,” BIL said.
LOLC said with transition of LOLC from a leasing company to a holding company, the Group is currently engaged in an investment holding reorganisation program to enhance shareholder value and business synergies.
LOLC divested its credit portfolios to its subsidiaries and with the latest move, has divested the leisure sector too. Having realised the growth potential in the leisure sector, with peace returning to the country, the LOLC Group in a strategic move acquired three hotel companies in May 2010 which marked its entry into the sector. The Group is confident that the ongoing accelerated infrastructure development will offer a unique platform for the development of the leisure sector.
Prior to the acquisition, LOLC Board passed a resolution to effect a share buyback and consequently BIL received Rs. 435 million as consideration for the shares transferred back to LOLC Leisure. LOLC got Rs. 1.05 billion.
BIL said the landmark beach resort hotel which is currently being built by Riverina Resorts Ltd. on the much sought after “golden mile” beach at Beruwela will propel the company to even greater heights in the leisure sector upon commencing operations in 2016. BIL will also derive excellent value from the recently refurbished Eden Hotel Lanka PLC, which has won many recent national and international awards reflecting its service excellence. The exclusive Dickwella Resorts Ltd. has become even closer to Colombo with the Southern Expressway extending to Matara.
BIL also took over the business operations of Brows Tours Ltd., and BG Air Service Ltd., as part of Group business reorganisation and intends to revitalise the travel arm of the Group to compliment the leisure sector.
BIL’s other sectors include investments, plantation (tea and rubber), hydro power, porcelain and construction.
BIL and LOLC Group have common directors. Ishara Nanayakkara, Executive Chairman/Director of BILL is also the Deputy Chairman of LOLC. W.D.K. Jayawardena, Director at BIL is the Group MD and CEO of LOLC whilst Kalsha Amarasinghe serves as a Director at BIL apart from being Executive Director at LOLC.
Brown and Company holds 37% stake in BIL whilst LOLC Investments hold a further 13%.
