Sri Lanka-based LOLC Group's Browns Investments has plans to sell five of its hotels: The Eden Resort and Spa in Beruwala; Dickwella Resorts; The Paradise Resort & Spa in Dambulla; The Calm Resort and Spa in Pasikuda; and Kosgoda Turtle Bay, which is under construction, Business Times reported.
The share price surge at Eden during the past two months is due to Eden's internal restructuring where Browns sought to bring Paradise and Dickwella shares under this company. This internal restructure was intended to ease the potential sale, an unnamed source told the Business Times.
Eden’s share price increased from $.16 in March to $.43 this week. Stockbrokers were anticipating that something was "up." Browns will keep its hotel Riverina. “They will concentrate on promoting that," the source added. The Riverina Hotel development project is currently underway to renovate the former Riverina hotel into a 365-room upscale resort. Negotiations are also underway to secure a management deal with an international hotel chain to operate and manage the hotel on a long-term basis.
He also said that Browns is searching for local and foreign buyers. The four operating hotels are generating moderate results despite the challenging environment in which they operate. Compared to last year, higher profits are expected in 2017 and 2018.
LOLC divested its leisure department LOLC Leisure to Browns Investments in March 2014 for $43.42 million. LOLC Leisure made up a 70 percent subsidiary of LOLC and ran the five hotels and resorts. Browns Investments held the other 30 percent of the company.