Seylan Bank puts three Asia Capital hotels on auction block

 Asia Capital PLC yesterday said Seylan Bank has published auction notices on three of its hotel properties due to failure to settle their loans with the bank in a timely manner.
The three properties are Beach Resorts Kosgoda (Pvt) Ltd., Wadduwa Resorts (Pvt) Ltd., and Galle Beach CC Trust (Pvt) Ltd, which is an associate company of Asia Capital.

Asia Capital said the value of the three properties exceeds the loan outstanding of Rs.1, 621.5 million. The total value of the properties as per the 2023 annual report is Rs.3, 640.1 million, which is equivalent to 44.54 percent of the total asset value of the three companies. 
“Aware of the situation the Board of Directors has resolved to safeguard the assets of the companies and that the company is in the process of coming up with a plan to settle the outstanding creditors, which will be notified in due course,” Asia Capital said in a stock market filing. “In the meantime, Directors will take the appropriate steps to safeguard the assets including making further representations to the banking institution,” it added.
Asia Capital said in spite of its resorts witnessing rebound in occupancies during the second half of the year, driven by domestic travel and improved tourist travel after the Easter attacks in 2019 and the CVOID pandemic in 2020 and 2021, the operating margins remain under pressure given the increased input and utility costs. As a result, the company said yields did not pick up commensurately since the benefit of foreign currency revenue was limited due to the gradual recovery of tourism.