LOLC Group’s USD10.7 million acquisition of Serendib Hotels

Sri Lanka: LOLC’s acquisition move is to capture growth in the tourism sector post-COVID

Aerial view of Colombo and Galle Face Green. ViduGunaratna/Shutterstock

Browns Investments PLC (BI), a strategic investment arm of LOLC Holdings PLC, acquired the controlling stake of Serendib Hotel PLC, a subsidiary of Hemas Group, of 55.6 percent, for a total of INR792 million (USD10.7 million), reported the Daily Mirror.

The investment was made by Eden Hotel Lanka PLC, BI’s subsidiary leisure firm.

The voting shares were purchased at INR14.20 per share for a total of INR608 million, while the non-voting shares were purchased at INR9.60 per share.

As of September 30, 2020, Serendib Hotels PLC’s net asset value was valued at INR18.78. The acquisition is expected to spark a mandatory offer.

Serendib Hotels PLC holds the majority shares of Dolphin Hotels PLC, Hotel Sigiriya PLC, Serendib Leisure Management Ltd, Frontier Capital Lanka (Pvt.) Ltd, and Sanctuary Resorts Lanka (Pvt.) Ltd.

Kasturi Chellaraja Wilson, Hemas Group CEO, stated, “in line with the group’s portfolio direction and focus on uplifting return on equity from the core segments, we have made a strategic decision to increase investments within our consumer, healthcare, and mobility sectors.”

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With this move, BI will put in Club Hotel Dolphin, Hotel Sigirya, Avani Bentota Resort, and Lantern Beach Collection, Mirissa, as well as its management companies to its existing leisure portfolio, growing the company in the tourism business.

BI also believes that this new investment is an important element in its long-term leisure strategy of structuring a strong, assorted leisure portfolio in the Maldives and Sri Lanka.

Through the years, BI has taken steps in diversifying its investment portfolio, extending operations into related businesses and construction, plantations, along with other strategic investments.

Ishara Nanayakkara, Chairman at BI, said, “the carefully executed investment strategy of BI with a focus in the leisure sector building the optimum footprint, is well-positioned to capture the post-COVID growth in the tourism business. Building the construction business with complementary businesses and growth in the agriculture and plantations with expansion into value chain development will position Browns Investments as a strong and robust diversified group within LOLC Group with strong shareholder value creation in the medium to long term.”