Singaporean buyers yet to finalize due diligence on Weligama Bay Marriot

East West Properties PLC last week said the financial and legal due diligence for the sale of its subsidiary Weligama Hotel Properties Ltd. (WHP), which owns and operates Weligama Bay Marriot Resort & Spa, has not been finalized yet by the Singaporean buyers.

Early March, East West Properties said it signed a letter of intent to sell its entire 72 percent stake in WHP to Singapore HPL Hotels & Resorts Pte. Ltd. However the stock market disclosure filed by the company did not give any indication of the possible sale price. 

Businessman Nahil Wijesuriya and his children own about 85 percent of East West Properties. Sri Lanka’s Employees’ Provident Fund also holds a stake in Weligama Hotel Properties Ltd.

HPL Hotels & Resorts has 12 properties in Asia-Pacific and the Indian Ocean, with a total of 2,886 rooms, including resorts such as Gili Lankanfushi – Maldives and The Boathouse – Phuket.

HPL Hotels & Resorts has also made an offer to invest in and upgrade the colonial-era Grand Oriental Hotel (GOH) that overlooks the Colombo Port and belongs to the Bank of Ceylon. 

A Cabinet spokesperson said they were studying HPL Hotels & Resorts’ proposal in this regard.

For the nine-months ended December 31, 2017, East West Properties made a net loss of Rs.258 million on revenue of Rs.445 million, up over 100 percent, compared to the corresponding period of the previous year.

The company’s net asset value per share on the same date stood at Rs.8.76. 

At the time of the first announcement on March, 07, the East West Properties share closed on Rs.15.80, down 20 cents or 1.25 percent. But the share closed at Rs.19 last Friday. Since the initial announcement, there were at least three instances, where East West Properties directors engaged in sale of shares.