Amaya Leisure divests subsidiary to Dhammika Perera at huge premium

Amaya Leisure PLC, Hayleys group’s leisure arm has sold 6.18 million shares or 84.3 percent of its subsidiary, The Beach Resorts Limited, to businessman Dhammika Perera for a consideration of Rs.330.1 million in a related party transaction, a stock exchange filing by the company said. 

Perera is a director at both Amaya Leisure PLC and The Beach Resorts Limited. He is also the Co-Chairman and controlling shareholder of Hayleys PLC. 

The deal has taken place at a significantly higher premium as the stake had a carrying value of Rs.61.8 million in the books of Amaya Leisure PLC as at March 31, 2016. This translates into a book value of Rs.10 per share whereas the deal has valued The Beach Resorts share at Rs.53.44.

The Beach Resorts Limited is a freehold property located in Wadduwa to an extent of 2.2017 hectares.  Amaya Leisure PLC said the rationale for the change in share ownership of its subsidiary is, “to rationalize the investment portfolio of the company”.  The value of the deal exceeded 5 percent of the consolidated total assets of Amaya Leisure PLC as at March 31, 2016. While the value of consolidated assets of Amaya Leisure PLC was Rs.5.86 billion, 5 percent of those assets translate into Rs.293.17 million. But the value of the deal was Rs. 330.1 million. 

The related party transaction review committee of Hayleys PLC, which also acts as the related party transaction review committee to Amaya Leisure PLC, is of the view that the transaction, “is on normal commercial terms, and is not prejudicial to the interest of the said entities and to the minority shareholders of the said entity”. 

However, the committee had not obtained any other opinion from an independent expert prior to forming its view on the transaction.  

An independent valuation on the Wadduwa property has been finally obtained on January 21, 2015.  Yet the property has remained dormant up to now, the annual report of Amaya Leisure PLC said. 
Currently Amaya owns and manages 3 properties in Kandy, Dambulla and Passikudah. However Hayleys under its leisure business owns and operate seven resorts in Sri Lanka through the Amaya brand comprising 659 four and five-star class and boutique rooms and one city hotel— The Kingsbury— which has 229 five-star rooms.

In July 2016, Amaya ventured into Maldives through its US $ 23 million acquisition of a luxury resort with 51 villas. 

For the six months ended September 30, 2016, Amaya Leisure group posted a net profit of Rs.100.8 million or Rs.1.53 a share, an increase of 14 percent from the same period last year. 

As at September 30, 2016 Dhammika Perera-controlled Hayleys PLC held 40.32 percent stake in Amaya Leisure while Hayleys’ associate company, Dean Foster (Private) Limited, held 21.34 percent stake. 

The state-controlled Employees’ Provident Fund (EPF), held another 9.62 percent being the third largest shareholder. Perera had a direct holding of 0.93 percent stake in the company.