13 December 2024 12:20 am Views - 4656
By Nishel Fernando
| Ashok Pathirage |
Sri Lanka’s Softlogic Holdings which is going through capital restructuring said the Group is still actively seeking buyers for its hotel sector.
“...We are actively seeking buyers for our hotel sector, with a focus on securing pricing at valuations that accurately reflect the full potential of these businesses,” Softlogic Holdings Chairman Ashok Pathirage told the shareholders in its latest annual report.
The two hotel properties owned by Softlogic recently went through rebranding after the management was transitioned to Minor Hotels Group. Accordingly, five-star 219 bedroom Mövenpick Colombo was rebranded to NH Collection Colombo and four-star Centara Ceysands Resort & Spa rebranded to NH Bentota Ceysands Resort. Both hotels showcased strong performance in FY24, benefiting from Sri Lanka’s tourism rebound.
Meanwhile, Pathirage emphasised that capital restructuring, including debt reduction, remains a critical priority for restoring the Group’s financial position, while assuring the Group’s shareholders that all necessary measures are being taken to address it.
In September this year, Softlogic Holdings successfully concluded a 1:4 rights issue at Rs. 10.00 per share, raising Rs. 2 billion, which was utilised to settle debt. In addition, Softlogic Life Insurance PLC carried out a buy-back of 5:32 ordinary shares at Rs. 102.40 per share, providing Softlogic Capital PLC with Rs. 2.6 billion to further reduce debt.
Moreover, Pathirage noted that Softlogic negotiated with lenders to restructure existing debt and secure more favourable financing terms, enabling more effective cash flow management.
Meanwhile, the second phase of the equity-raising programme is scheduled for this month, involving the issuance of warrants up to Rs.1.27 billion attached to the rights shares.
“… (This) is a strategic initiative aimed at further strengthening capital, reducing debt, and enhancing the Group’s operational flexibility,” Pathirage added.
Meanwhile, Softlogic has halted the construction of Odel Properties One, a flagship real estate project by Softlogic Properties amidst fund shortfalls, and is awaiting an equity infusion. Odel Properties One is envisioned as a transformative mixed development, integrating premium retail, residential, and lifestyle spaces. Softlogic was planning to raise Rs 19.35 billion funding to complete the construction of the Odel mall.
However, Softlogic is venturing into medical tourism with the development of a 500-bed hospital in Colombo Port City, targeting regional markets with world-class facilities.
“The Asiri Port City Project plans to tap into the burgeoning medical tourism sector. This ambitious initiative is expected to enhance Sri Lanka’s status as a destination for high-quality healthcare, attracting international patients and fostering the development of specialised medical services,” Pathirage noted.
According to the auditors, Softlogic Group incurred a loss after tax of Rs.15.2 billion for the year ended 31 March 2024 and its Group’s current liabilities exceeded its current assets by Rs. 76.96 billion as of the reporting date.
The reported accumulated losses of the Group amounted Rs. 69.59 billion and the Group reported a negative net assets position of Rs. 30.199 as of the reporting date.