What a imprasive news... MAL has informed their shareholders the details of the proposed hotel project that they're raising funds through Right Issue!
A subsidiry of MAL - Malwatte Hotels and Resorts (Pvt) Ltd (MHRL)
- is to develop a resort island in Maldives .... a 4 star resort property comprising 70 bungalows (initially) which costs USD 26 millions.
The most exciting fact is the resort to be built will be managed by HILTON - world wide hotel chain
and the MOU is already signed on 28/03/2011.
Investment of USD 26 millions in MHRL will be on 50:50 Debt:Equity basis, while the entirety of debt protion (USD 13 millions) would be a loan by MAL. Out of equity USD 8 millions (62%) by MAL
, Aprox. 10% (USD 1.3 millions) to the owner of leasehold right of the island. The balance 28% will be raised via a Private Placement in future.
the project expected to commence in September 2011 and expected to be commence oprtations by September 2013.
Impressive, very impressive ... but MAL hasn't market the concept (see how REEF market their hotel projects)
According to the information distributed among shareholders, they already formed the company Malwatte Hotels and Resorts (Pvt) Ltd (MHRL) and signed MOU with HILTON - world wide hotel chain
in March 2011.
However no corporate disclosure made by the company so far to CSE, I gone through the Annual Report (2010) published in May 2011 http://www.cse.lk/cmt/upload_report_file/722_1307937048.pdf, but neither Chairman nor Directors has shown any interest or indication of this diversification in to Leisure Sector either in Sri Lanka or Maldives.
However, their AGM
has been scheduled on 15th July 2011 (Tomorrow) at 10.30am
at Sri Lanka Foundation Institute, Colombo 07. We can expect some thing special (more details about the project) there.
If somebody here participating it ...... please update!
Can anyone knows of the relationship between Wayamba Plantations (Pvt) Ltd
(the management company of MAL) and Lanka Mountcastle (Pvt) Ltd
I smell some thing ...
Lanka Mountcastle is the major Non Voting shareholder with 86.4% stake having 1,987,300 shares of total Non Voting shares.But their name is not in the @) largest Voting Share list.
As most of you know, I'm a fan of plantation stocks/sector and obviously a fan of MAL, purely
on the ground that MAL is the most undervalued stock in the plantation sector.
When MAL first announced their intention to diversify in to Leisure Sector, I also assumed that MAL going to convert plantation bungalows in Badulla in to hotels/resorts. Now, they have declared that [by noticed to the shareholders, but not as a corporate disclosure to CSE].
I have few question in my mind;1. Why MAL suddenly decided to go for USD 26 million Leisure Investment in Maldives.
As far as I know, MAL is managed by "Bogtstra Family", a well respected planters, but none of their businesses are in Leisure/tourism. 2. How MAL could approach "HILTON" to manage their proposed resort in Maldives.
I don't think "HILTON" will interest manage a poor profile hotel developed by Sri Lankan Planters. So, how "HILTON" was approached by MAL without any experience in the sector and why "HILTON" went for a MOU with a company like MAL.3. Why MAL wanted to offer MAL.N to shares to shareholders of MAL.X
(May be the samething that Moneylover* think of)
Usually Voting shares (i.e. MAL.N) are not offered to shareholders of Non-Voting MAL.X as rights (may be opposite side) as it dilutes voting rights of the owers. But, MAL has generously did that. I guess there must be an invisible hand behind this decision of MAL
, details are yet to disclose. Hopefully shareholders will question for the directors at the AGM. Unfortunately I won't be able to attend AGM (tomorrow), but hope details will be update by some members participating it.
*@Moneylover - Sorry I have no idea whether Wayamba Plantations (Pvt) Ltd (WPPL) and Lanka Mountcastle (Pvt) Ltd (LMPL) are with the same ownership. However there must be some sort of close relationship between them otherwise LMPL would not invest in 84.6% non-voting shares.
When I checked details of LMPL on the web, I noticed they are basically in the Apparel Sector and Mr. Zahid Hussein A. I. Jafferjee is the Owner/Managing Director.