Aitken Spence Hotel in debt/equity swap with subsidiary

Aitken Spence PLC’s hospitality arm, Aitken Spence Hotel Holdings PLC, last week decided to accept 50 million shares from its fully-owned subsidiary, Golden Sun Resorts Private Limited, which operates a 200-room resort in Kalutara, for a consideration of Rs.500 million, a fling to the stock exchange said.

In what appears to be a debt-toequity swap, the parent company has accepted the shares in Golden Sun Resorts for the said consideration, which was provided to the latter from time to time for the refurbishment and upgrading work.

“We wish to inform you that Aitken Spence Hotel Holdings PLC has from time to time advanced funds to the total of Rs.500,000,000 to Golden Sun Resorts Private Limited, its fullyowned subsidiary, for refurbishment and upgrading work carried out by the said subsidiary,” the filing stated. As of March 31, 2015, Golden Sun Resorts Private Limited had 150.8 million issued shares with a value of Rs.893.7 million.

With the issuance of shares, the total issued share capital increases to 200.8 million shares bringing up the total value of the share equity to Rs.1.4 billion. The financial statements for the period ended March 31, 2015 showed a Rs.502 million outstanding facility to the parent after a Rs.25.1 million settlement. The 110-room resort company was acquired by Aitken Spence Hotel Holdings in 2010 and three years later the resort was refurbished before it was rebranded as ‘The Sands by Aitken Spence Hotels’.

The Sands, situated in a 5.93-acre freehold land in Kalutara, has a 192,989 square feet build area. However, the most recent refurbishment added another 90 rooms, increasing the total room capacity up to 200. As of March 31, 2015,

The Sands had a total asset base of Rs.1.6 billion while the net assets were valued at Rs.1.4 billion, demonstrating very little liabilities by the company – probably the funds provided by the parent company from time to time. Apart from Sri Lanka, Aitken Spence Hotel Holdings has operations in the Maldives, India and Oman with a total room inventory in excess of 1,900. For the nine months ended December 31, 2015, Aitken Spence Hotel Holdings PLC posted a net profit of Rs.781.6 million, down 31 percent year-on-year. Poor performance in the Maldivian tourism sector largely impacted the group performance.