14 October 2021 01:59 am
Ceylon Hotels Maldives (Pvt.) Ltd, a unit of Sanjeev Gardiner-controlled Ceylon Hotels Corporation PLC (CMHL), has decided to divest its 50 percent stake in the joint venture (JV) resort project located on the island of Ambara, in Vaavu Atoll, in the Maldives, for a US $ 4.49 million.
CMHL early this week in a stock filing announced that its sub-subsidiary Ceylon Hotels Maldives (Pvt.) Ltd has reached a ‘conditional’ sales and purchase agreement (SPA) with Hong Kong-based Ceylon Hotels Maldives (Pvt.) Ltd, to divest the 50 percent stake in the JV company of the Ambara Island resort project, Handuwaru Ocean Holidays (Pvt.) Ltd.
“As per the SPA, the conclusion of the sale and eventual transfer of ownership of the 50 percent stake, is subject to due diligence and satisfaction of certain conditions precedents,” the company noted.
In early 2018, CMHL through Ceylon Hotels Maldives (Pvt.) Ltd entered into a 50:50 JV with a subsidiary of Engineering Company Ltd (CHEC), Zhen Hua Engineering Company Ltd (ZHEC), to develop, construct and operate an upscale resort of 85-100 rooms on Ambara Island, Vaavu Atoll, in the Maldives.
The total cost of the project was estimated at US $ 50 million and it was scheduled to open in 2020. However, Handuwaru Ocean Holidays (Pvt.) Ltd didn’t report any revenue for both 2020 and 2021 financial years. The firm recorded Rs.11.8 million and Rs.4.1 million in losses for 2020 and 2021 FY, respectively.
Vaavu Atoll is consistently rated as one of the top 10 diving spots in the Maldives.
CMHL’s effective holding of Ceylon Hotels Maldives (Pvt.) Ltd and Handuwaru Ocean Holidays (Pvt.) Ltd was 78.71 percent and 39 percent, respectively.