As the Government of Sri Lanka (GoSL) advances its plans to divest its shares in Hotel Developers (Lanka) Ltd (HDL), the owning company of the Colombo Hilton, only one company, Melwa Hotels & Resorts (Pvt) Ltd, has submitted an offer by the specified deadline.
Melwa Hotels & Resorts (Pvt) is a subsidiary of Melwa Group which is a diversified conglomerate in Sri Lanka as well as the largest steel manufacturer in Sri Lanka.
Issuing a statement, the Ministry of Finance, Economic Stabilization, and National Policies stated that the divestiture process began on 10th October 2023, when the GoSL called for Expressions of Interest (EoI) from interested parties. From the nine responses received, four bidders were prequalified for the Request for Proposal (RfP) stage after a thorough evaluation by the Cabinet-appointed Special Project Committee (SPC) and the Special Cabinet Appointed Negotiating Committee (SpCANC). The RfPs were issued on 2nd May 2024.
During the buy-side due diligence phase, two of the prequalified bidders withdrew from the process, leaving only two bidders by the submission deadline of 2 pm on Wednesday, 10th July.
This offer will now undergo a comprehensive evaluation by the SPC and SpCANC to ensure it meets the terms and conditions outlined in the RfP and adhere to the Special Guidelines on Divestiture of State-Owned Enterprises, as approved by the Cabinet of Ministers. The SpCANC is authorized to engage in further discussions with Melwa Hotels & Resorts (Pvt) Ltd to refine the offer. The committee’s recommendation will then be submitted to the Cabinet of Ministers for the final decision.
Colliers International Consultancy & Valuation (Singapore) Pte Ltd, in collaboration with Platinum Advisors, is acting as the Transaction Advisor for this divestiture. Their expertise is crucial in navigating the complexities of the transaction, ensuring transparency, and maximizing value for the state.
The successful divestiture of HDL shares is anticipated to bring significant financial inflow and operational expertise to the Colombo Hilton, further boosting Sri Lanka’s tourism sector and contributing to the nation’s economic recovery and growth.
