Hemas carries out Rs.5 bn restructuring exercise on travel and leisure subsidiaries

Diversified conglomerate Hemas Holdings PLC appears to be having a closer look at its subsidiaries and associate companies under different business segments to place them where they fit the best to better structure and manage them.
Accordingly, Hemas Holdings last week announced a slew of changes in the shareholding structure of more than half a dozen entities in the group’s travel and leisure businesses. 
Last Friday, Hemas Holdings acquired 21.3 million voting shares or 28.14 percent stake in Serendib Hotels PLC at Rs.24.30 a share from Leisure Asia Investments Limited, a 100 percent owned subsidiary of Hemas Holdings for a consideration of Rs.516.4 million. 
On the same day, Hemas bought 10.2 million non-voting shares or 28.23 percent stake in Serendib Hotels at Rs.18 a share from Leisure Asia Investments Limited for a total consideration of Rs.183 million.  Hemas Holdings said the transactions were carried out to increase its direct holding in Serendib Hotels. 

With the purchase of shares, Hemas took direct control of Serendib as its voting shareholding in the company climbed to 55.94 percent from 27.8 percent earlier. The non-voting shareholding also rose to 50.48 percent.
Hemas group’s leisure business mainly comes under Serendib Hotels, which operates four 4-star class facilities—two under Avani brand in Bentota and Kalutara— and another two in Dambulla and Negombo—Hotel Sigiriya and Club Hotel Dolphin. 
Hemas group’s newest 5-star hotel properties under Anantara brand was opened in Tangalle and Kalutara under Peace Heaven Resorts Limited, a fully owned subsidiary of Hemas Holdings. 
Meanwhile, on the same day in a bid to restructure the group’s travel and aviation sector businesses under one arm, Hemtours Private Limited sold 8.6 million shares at Rs.224.05 a share to Leisure Asia Investments Limited for a total consideration of Rs.1.93 billion. Hemtours is a 100 percent owned subsidiary of Hemas Holdings. 
Further Mowbray Hotels Limited—an 89 percent subsidiary of Hemas Holdings— sold 6.5 million shares at Rs.30.27 a share to Leisure Asia Investments Limited for a consideration of Rs.195.7 million. 
Also, Peace Heaven Resorts Limited sold 31.9 million shares at Rs.115.06 a share to Leisure Asia Investments Limited for a total consideration of Rs.3.7 billion to restructure the group hotel sector investments. 
All these three related party transactions were carried out by allotting Leisure Asia Investments Limited’s shares in lieu of the part settlement of the purchase consideration. 
Accordingly, a total of 219.2 million shares to the value of Rs.5.1 billion were allotted, a disclosure by Heams Holdings said. 
Meanwhile, tough a disclosure on March 22, Hemas Holdings said it had sold 100 percent stake held in five of its travel and tour related subsidiaries to Hemtours for a total consideration of Rs.1.5 billion, listing them under the latter as wholly owned subsidiaries. 
Hemas Holdings also purchased 7.5 million ordinary shares of Hemas Development Private Limited amounting to 32 percent of its issued share capital from Hemtours for a consideration of Rs.415.5 million. 
For these two transactions, Hemtours issued 4.8 million shares to Hemas Holdings. 
Hemas Holdings in 2014 exited from its power business to consolidate its strength around its key businesses—FMCG, healthcare, leisure and transport.