Market speculation is rife that Sri Lanka’s diversified Hemas PLC may exit from power business or trim its exposure to the sector in order to focus more on its core businesses, FMCG and pharmaceuticals, while aggressively expanding its leisure sector operations, Mirror Business learns.
Hemas has a listed power sector entity, Hemas Power PLC, which operates both thermal and hydropower plants.
Hemas seems to be expanding its thrust on the leisure sector in comparison to presence in the sector a couple of years back
Despite the higher revenue of Rs.2 billion, the power sector of Hemas reported an after-tax loss of Rs.520 million, impacted by a Rs.576 million impairment as the company had estimated the recoverable value of its thermal assets to fall short of their carrying value. Hemas Power operates the thermal power plant, Heladhanavi, a 100 MW joint venture with Lakdhanavi Ltd. The plant’s power purchase agreement with the Ceylon Electricity Board is scheduled to expire next year.
The government appears to have taken a decision not to renew the power purchase agreement with private thermal power producers amid concerns of relatively higher prices paid per unit.
Hemas Power operates three hydropower plants— the 2 MW Giddawa mini hydro, 2.6 MW Agar Oya mini hydro and 2.4 MW Magal Ganga mini hydro.
The company also has a 29.3 percent stake in the hydropower firm Panasian Power.
When queried on the matter, Hemas Group CEO Steven Enderby said, “I shouldn’t be commenting on market speculation.”
Hemas Power CEO Kishan Nanayakkara also refused to comment stating that only the holding company could comment on such a matter.
Meanwhile, Hemas seems to be expanding its thrust on the leisure sector in comparison to presence in the sector a couple of years back.
When queried on the matter, Hemas Group CEO Steven Enderby said, “I shouldn’t be commenting on market speculation
Hemas has entered into a joint venture with Thailand’s Minor Group, to build three new hotel properties in partnership with Thailand-based Minor Group.
Hemas Holdings then Chief Executive Husein Esufally last year told the shareholders that the three properties located in Southern Sri Lanka—Tangalle, Kalutara and Ambalangoda— will be developed at a cost of US $ 70 million and branded under the Avani and Anantara brands of Minor Group.
Hemas currently controls four resort hotels with a room capacity of 410 through its subsidiary, Serendib Hotels PLC.
A couple of weeks back Hemas bought a further 7 percent stake in Serendib Hotel PLC for Rs.164 million, displaying its bullishness over the sector.
Hemas Holdings along with its fully-owned subsidiary Leisure Asia Investments Ltd held little over 50 percent of Serendib Hotels PLC, as at March 31, 2014.
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