Eden Hotel Lanka PLC (Eden) said it is buying 99.9 percent of Dickwella Resorts (Pvt) Ltd (Dickwella), a 76-room luxury property for Rs.1.5 billion from LOLC Leisure Ltd, a subsidiary of LOLC Group.

Both Eden and Dickwella were direct subsidiaries of LOLC Leisure Ltd with stakes of 46.21 percent and 100 percent respectively. LOLC Group has a 70 percent stake in LOLC Leisure Ltd.

LOLC Group Chief Financial Officer Sanjeevani Kotakadeniya said the idea of Dickwella being pushed under Eden was a part of the restructuring of their leisure sector companies.

“This is part of our program to restructure all our hotels. We bought these companies one by one without a proper structure in mind but now we have started to streamline all our hotels in a much structured manner,” she said.

However at the time of forming LOLC Leisure Ltd, LOLC Group said all its hotels and resorts under various other subsidiaries will come under LOLC Leisure.

However Kotakadeniya said this change of structure would not conflict with what they initially told because Eden is anyway a subsidiary under LOLC Leisure Ltd.

LOLC Group acquired Dickwella Resort in January 2012 for little over Rs.1 billion through LOLC Leisure but the transfer has been done booking a capital gain of about Rs.500 million for Rs.1.5 billion.

When quarried the rationale behind such a huge capital gain within a matter of less than 2 years since the acquisition, she said the company had gradually increased the land bank with subsequent acquisitions.

“After we made the initial investment in Dickwella property we bought adjoining lands making it a much bigger property. So, the Dickwella property is much larger now than what it was.”

“So, if you really look at it, the group has not made a huge profit from the transfer deal,” she explained.

Lanka Orix Leasing Company PLC (LOLC) made its first foray in to leisure sector back in mid 2010 with a billion rupee acquisition of Confifi Group of hotels owned by the Furkhan family and since then it made slew of acquisitions in to the hotel sector making it a larger leisure sector player. (DK)