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Kalpitiya Beach seeks alternative location for delayed resort

17 April 2015 07:55 am - 0     - {{hitsCtrl.values.hits}}


Kalpitiya Beach Resort PLC, a subsidiary of Citrus Leisure PLC is looking for alternative locations in Sri Lanka and the Maldives to develop its project, given the lack of development in the Kalpitiya area.
“Due to the delay in the development in the Kalpitiya region by the government, the directors were compelled to hold back their plans to commence the construction of the Hotel, and explore the feasibility of an alternative location, within Sri Lanka and Maldives,” the company said in a stock exchange filing.This was in response to the Securities and Exchange Commission (SEC) calling on the company to hold an Extraordinary General Meeting (EGM) by May 10 to account for Rs. 283.5 million raised through an Initial Public Offering in November 2011.
The SEC noted that the prospectus of the IPO stated that construction would commence in December 2011, and the resort would be operational early this year, and any contradiction to the plans would be communicated to the shareholders through an EGM, none of which had occurred.  The company statement also said that it is looking for possible investors to overcome risks in developing in the underdeveloped Kalpitiya region, as well as partners who could create products such as golf courses and theme parks. However, it also said that the new regime has shown interest in developing Kalpitiya, which would boost the viability of the project. The Kalpitiya Dutch Bay Resort Development Project, conceived under the previous regime, was to become the country’s flagship tourism destination, which was to include an underwater observatory and draw investments exceeding US$ 4 billion.  Less than US$250 million has been attracted so far by two developers. Kalpitiya Beach Resort added that investors from Spain, Chile, Russia and Singapore have shown interest in the property, and that the company is ready to commence construction, having obtained all pertaining approvals. The company released financial statements for the period ending February 28 2015, showed a loss of Rs. 102.69 million, compared to a loss of Rs.132.71 million for the year ending March 2014. The loss was mostly driven by financial costs, from loans totaling Rs.726.55 million. Citrus Leisure PLC, a subsidiary of George Stuart Finance PLC owns 69.26 percent of the shares in Kalpitiya Beach Resort. The EGM would be held on May 8 to pass the resolutions of the director board.

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