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Sri Lanka: Galadari Brothers sell 16.1% of GHLL to the Government of Dubai
Oct 31, 2011 (LBT) - One of Sri Lanka’s iconic hotels in financial capital, Galadari Hotel's (GHLL) 29.5 million shares (16.1% stake) were sold by its owners; Galadari brothers on 31 October 2011 at a deal valued at Rs.1.18 billion; boosting Sri Lanka’s Bourse turnover at a time when stock investors were dragged away in a midst of fist fight among the regulator and top investors.
Dubai's oldest family-owned conglomerates, Galadari Brothers Company LLC has sold its 16.1% stake in Sri Lanka’s Galadari Hotel to the Dubai government as a part of its debt restructuring process, the market analysts told to LBT.
“Approximately 16.1% shareholdings have been transferred today as a part of restructuring of shareholdings of Galadari brothers which had been delayed for a long period of time due to delay in obtaining exchange controllers approval”, the sources added.
According to sources,this transaction was carried out as a result of agreement with the reached between Galadari Brothers and Government of Dubai to sell part of its shareholdings in GHLL as a settlement and structuring of its finances in Dubai. This transaction does not result in a takeover of the Hotel but merely a formalization of agreement reached between Galadari Brothers and Government of Dubai. "Further this is only a brokerage deal and no consideration is expected to change hands" our source told LBT.
According to some analysts the Galadari (GHLL) share value is expected to dilute as a result of the conversion of outstanding debt to equity by the majority shareholders.
All the shares changed hands at Rs.40 a share in several crossings or off-market private deals.The transaction was done in several blocks in which three blocks of each 1,271,313 ordinary voting shares of Galadari Hotel (GHLL) held by Galadari brothers (Galadari Brothers Company LLC) were sold to the buyer at Rs.40 per share between 10:40 a.m. to 10:57 a.m. Later another two blocks of each 635,665 ordinary voting shares of GHLL changed hands at 11:12 a.m. to 11:15 a.m. at Rs.40 per share.
Accordingly the Sri Lankan dull market turnover rose over Rs.1 billion during the first two hours on 31 October ever since the All Share Price Index (ASPI) dipped by 237.55% (two year low) on 13 October this year.
Early May this year Galadari Hotels in a filling to Colombo Bourse said that it had finally struck a deal to convert Rs. 6.3 billion of debt into equity. Subsequently the filling noted that its Board at a meeting held on 27 April unanimously resolved to restructure the Balance Sheet in a manner which would enable Galadari Hotel to capture to its benefit the positive growth trends expected in the tourism industry and to operate competitively and profitably.
The Board has then approved in principle that the restructuring should be by way of a conversion of debt to equity. And on 5 October Galadri Hotels said that its board has decided to convert the firm’s approximately 6.3 billion debts into equity, at a price of Rs.15.26 per share, subjected to the approval of the creditors, the Central Bank and the Securities and Exchange Commission.
It further stated that Galadari owes Rs.583 million to the National Insurance Trust Fund (NITF) and Rs.5.7 billion to its parent, Galadari Brothers Company (LLC) and the shares arising from the conversion of NITF debt will be allotted to the Secretary to the Treasury of Sri Lanka.
The company also said that the conversion price is based on valuation reports it obtained from NDB Investment Bank and PricewaterhouseCoopers.
GHLL had to rely on borrowings from the NITF and its parent company as a result of the damages it sustained from a terrorist attack in 1996.
Meanwhile earlier in 2006 it was revealed that on 11 October 2006 that The Dubai government has taken a 30% stake in one of Dubai's oldest family-owned conglomerates, Galadari Brothers Co., according to a document seen by Zawya Dow Jones.
That time subsequently it was reported that a memo dated 5 October says that a decree from a judicial court appointed by Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, has restructured the shareholding of Galadari Group of Companies, which includes the English-language Khaleej Times newspaper, an auto dealership, three hotels and the franchise for Baskin Robbins ice cream.
The memo said the existing board has been dissolved, and replaced by three temporary members, one of whom is the existing chairman of Galadari Brothers and the Khaleej Times' editor-in-chief, Mohammed Abdulrahim Galadari.
People aware of the matter said that time the government's 30% stake replaces Galadari's debt to the government and other Dubai royal-family owned companies.
Galadari Brothers, founded by the late Abdulwahab Galadari in 1969, went bankrupt in the mid-1980s, at which point the huge conglomerate was split between the sons.
http://www.lankabusinesstoday.com/stock-market/deals/642-galadaries-deal
Oct 31, 2011 (LBT) - One of Sri Lanka’s iconic hotels in financial capital, Galadari Hotel's (GHLL) 29.5 million shares (16.1% stake) were sold by its owners; Galadari brothers on 31 October 2011 at a deal valued at Rs.1.18 billion; boosting Sri Lanka’s Bourse turnover at a time when stock investors were dragged away in a midst of fist fight among the regulator and top investors.
Dubai's oldest family-owned conglomerates, Galadari Brothers Company LLC has sold its 16.1% stake in Sri Lanka’s Galadari Hotel to the Dubai government as a part of its debt restructuring process, the market analysts told to LBT.
“Approximately 16.1% shareholdings have been transferred today as a part of restructuring of shareholdings of Galadari brothers which had been delayed for a long period of time due to delay in obtaining exchange controllers approval”, the sources added.
According to sources,this transaction was carried out as a result of agreement with the reached between Galadari Brothers and Government of Dubai to sell part of its shareholdings in GHLL as a settlement and structuring of its finances in Dubai. This transaction does not result in a takeover of the Hotel but merely a formalization of agreement reached between Galadari Brothers and Government of Dubai. "Further this is only a brokerage deal and no consideration is expected to change hands" our source told LBT.
According to some analysts the Galadari (GHLL) share value is expected to dilute as a result of the conversion of outstanding debt to equity by the majority shareholders.
All the shares changed hands at Rs.40 a share in several crossings or off-market private deals.The transaction was done in several blocks in which three blocks of each 1,271,313 ordinary voting shares of Galadari Hotel (GHLL) held by Galadari brothers (Galadari Brothers Company LLC) were sold to the buyer at Rs.40 per share between 10:40 a.m. to 10:57 a.m. Later another two blocks of each 635,665 ordinary voting shares of GHLL changed hands at 11:12 a.m. to 11:15 a.m. at Rs.40 per share.
Accordingly the Sri Lankan dull market turnover rose over Rs.1 billion during the first two hours on 31 October ever since the All Share Price Index (ASPI) dipped by 237.55% (two year low) on 13 October this year.
Early May this year Galadari Hotels in a filling to Colombo Bourse said that it had finally struck a deal to convert Rs. 6.3 billion of debt into equity. Subsequently the filling noted that its Board at a meeting held on 27 April unanimously resolved to restructure the Balance Sheet in a manner which would enable Galadari Hotel to capture to its benefit the positive growth trends expected in the tourism industry and to operate competitively and profitably.
The Board has then approved in principle that the restructuring should be by way of a conversion of debt to equity. And on 5 October Galadri Hotels said that its board has decided to convert the firm’s approximately 6.3 billion debts into equity, at a price of Rs.15.26 per share, subjected to the approval of the creditors, the Central Bank and the Securities and Exchange Commission.
It further stated that Galadari owes Rs.583 million to the National Insurance Trust Fund (NITF) and Rs.5.7 billion to its parent, Galadari Brothers Company (LLC) and the shares arising from the conversion of NITF debt will be allotted to the Secretary to the Treasury of Sri Lanka.
The company also said that the conversion price is based on valuation reports it obtained from NDB Investment Bank and PricewaterhouseCoopers.
GHLL had to rely on borrowings from the NITF and its parent company as a result of the damages it sustained from a terrorist attack in 1996.
Meanwhile earlier in 2006 it was revealed that on 11 October 2006 that The Dubai government has taken a 30% stake in one of Dubai's oldest family-owned conglomerates, Galadari Brothers Co., according to a document seen by Zawya Dow Jones.
That time subsequently it was reported that a memo dated 5 October says that a decree from a judicial court appointed by Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, has restructured the shareholding of Galadari Group of Companies, which includes the English-language Khaleej Times newspaper, an auto dealership, three hotels and the franchise for Baskin Robbins ice cream.
The memo said the existing board has been dissolved, and replaced by three temporary members, one of whom is the existing chairman of Galadari Brothers and the Khaleej Times' editor-in-chief, Mohammed Abdulrahim Galadari.
People aware of the matter said that time the government's 30% stake replaces Galadari's debt to the government and other Dubai royal-family owned companies.
Galadari Brothers, founded by the late Abdulwahab Galadari in 1969, went bankrupt in the mid-1980s, at which point the huge conglomerate was split between the sons.
http://www.lankabusinesstoday.com/stock-market/deals/642-galadaries-deal
