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Indian companies eager to buy Sri Lanka’s Canwill Holdings

By: Staff Writer

February 08, Colombo (LNW): Canwill Group ventures include a 47-story hotel project consisting of 458 rooms and 100 serviced apartments built to Grand Hyatt specks in Colombo 3 and construction of a luxury beach resort on 9.42 acres of beachfront land in the southern city of Hambantota.

Six companies mostly from India have been pre-qualified to submit Request for Proposal to acquire Canwill Holdings Ltd., which is developing a 47-story hotel project consisting of 458 rooms and 100 serviced apartments built to Grand Hyatt specks in Colombo 3.

The five Indian companies are RKG Fund 1-Scheme of RKG Trust, Gland Celsus Bio Chemicals Ltd., DB Realty Ltd., Jindal Films India Ltd., and Bright Star Investments Ltd. The sole Sri Lankan bidder is consortium Consulting Engineers and Contractors Ltd., and K.D.A. Weerasinghe and Company.

The short-listing follows the Expression of Interests which closed on 12 December last year. The SOE Restructuring Unit (SRU) said the EOIs received were evaluated in accordance with the terms and conditions set out in the Request for Expressions of Interest in compliance with the Special Guidelines on Divestiture of SOEs approved by the Cabinet of Ministers in July last year.

The short-listing was done by the Cabinet Appointed Special Project Committee and the Special Cabinet Appointed Negotiating Committee.Deloitte India is the transaction advisor for the divestiture of Government’s stake in Canwill Holdings.

Canwill was incorporated in December 2011 to invest in the Hospitality/Tourism sector. Its principal activities include investment promotion in the leisure sector and controlling and monitoring subsidiaries as a holding company.

The Government intends to divest all or part of equity shareholding in Canwill Holdings the parent company to Sinolanka Hotels & Spa Ltd. (Sinolanka) and Helanco Hotels & Spa Ltd. (Helanco).

Helanco holds 9.42 acres of beachfront land in the southern city of Hambantota for construction of a luxury beach resort.

The proposed transaction will include sale of shares of both these subsidiaries. However, if interests are received for subsidiaries separately, the Government reserves the right to carry further process accordingly.

The Sinolanka Hotels and Spa’s hotel and serviced apartment project’s structure and façade of the building is almost complete with substantial capex done.

Most of the approvals and planning for completion is in place as per global standards. With most of the time-consuming activities already completed, the hotel can be commissioned in a quick time frame.

The Project is notified as a ‘Strategic Development Project’ eligible for various tax concessions during the project implementation period as well as during commercial operations.

Helanco entered into a hotel management agreement with Hyatt International-Southwest Asia Ltd (Hyatt) on 27 March 2014, to operate the property as Hyatt Regency. It was envisaged to be a luxury beach resort. However, construction is yet to commence. The agreement between Hyatt and Helanco has since expired and is no longer valid. 

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