The Board of Directors of Eden Hotel Lanka PLC approved a 6-year funding facility from Seylan Bank PLC worth Rs. 1.5 billion, to finance the company’s purchase of Dickwella Resorts (Pvt) Ltd.
Both Eden Hotel and Dickwella Resorts are a part of the Lanka Orix Leasing Company (LOLC) group. Eden Hotel Chairman, Kapila Jayewardene is also a member of the Board of Directors of Seylan Bank.
The transaction, which was announced on November 1, 2013 as part of a restructuring of the Group’s leisure portfolio, saw Eden take direct control of the 76-room luxury property from LOLC’s hospitality arm, LOLC Leisure Ltd.
LOLC holds a 46.21 percent stake in Eden Hotels through another leisure subsidiary, Palm Garden Hotels PLC.
“This is part of our program to restructure all our hotels. We bought these companies one by one without a proper structure in mind, but now we have started to streamline all our hotels in a more structured manner,” LOLC Chief Financial Officer, Sanjeevani Kotakadeniya had told Mirror Business at the time of the transaction.
LOLC Group acquired Dickwella Resort in January 2012 for little over Rs.1 billion through LOLC Leisure but the transfer has been done booking a capital gain of about Rs.500 million for Rs.1.5 billion.
LOLC attributed the large capital gain to the purchase of land surrounding the Dickwella property subsequent to its acquisition.
LOLC made its first foray in to leisure sector back in mid 2010 with a billion rupee acquisition of Confifi Group of hotels owned by the Furkhan family, and since then it made a slew of acquisitions in to the hotel sector making it a larger leisure sector player.
Confifi Management Services (Pvt) Ltd holds a 10.7 percent stake in Eden Hotel, followed by the Employees’ Provident Fund (EPF) with 9.65 percent of issued share capital.