Browns Investments acquires Serendib Hotels for Rs. 792 m
LOLC Holdings PLC’s strategic investment arm, Browns Investments PLC (BI), yesterday acquired the controlling stake of 55.65% of Serendib Hotel PLC (Serendib) for a consideration of Rs. 792 million, the company said in a statement.
With this acquisition, BI will hold 56.67% of voting shares and 53.48% non-voting shares of Serendib. The investment was made by BI’s subsidiary leisure company, Eden Hotel Lanka PLC.
“The carefully-executed investment strategy of BI with a focus in the leisure sector building the optimum footprint is well positioned to capture the post-COVID growth in the tourism business.
Building the construction business with complementary businesses and growth in the agriculture and plantations with expansion into value chain development will position Browns Investments as a strong and robust diversified Group within the LOLC Group with strong shareholder value creation in the medium to long term,” said Browns Investments Chairman Ishara Nanayakkara.
With this investment, BI will add Club Hotel Dolphin, Hotel Sigirya, Avani Bentota Resort and Lantern Beach Collection, Mirissa along with their management companies to BI’s existing leisure portfolio, The Eden Resort & Spa in Beruwala, The Paradise Resort & Spa in Dambulla, The Calm Resort & Spa in Passikudah and Dickwella Resort & Spa, Sheraton Kosgoda Turtle Beach Resort managed by the Marriott Group and Riverina Resort in Beruwala with 375 keys, which is under construction.
In the Maldives, BI’s leisure properties under construction includes, Nasandhura Palace Hotel in the city of Malé and Bodufinolhu in the Ari Atol. Nasandhura Palace is in the most coveted location in the city, nearing completion and will be ready for occupancy in the year 2021 and is a mixed development consisting of 118 luxury apartments, a five-star hotel with 135 keys and an upscale mall with shopping and entertainment. Bodufinolhu, an international four-star property, once ready for commercial operations in 2021 will have a mix of water villas, beach villas and beach suites accounting for 100 keys.
The Group also has the lease rights to three islands reclaimed in North Malé, Bodufaru, Kaafu Atol, to be developed as three five-star properties with a total of 470 keys.
BI entered into a management agreement with Barceló, one of the largest global hotel operator chains to manage The Eden Resort and Spa, The Paradise Resort and Spa, Nasandhura and Bodufinolhu. Further, Barceló is to make an equity investment of 30% into the development of Bodufaru three island project.
The new investment will expand the leisure footprint of BI and the company is of the view that this will be a strong growth sector post COVID-19, gaining momentum in the latter part of 2021. The company believes that the new investment will complement its long-term leisure strategy of building a diverse leisure portfolio in Sri Lanka and in the Maldives.
Over the years, BI has developed its diverse investment portfolio, expanding its operations into construction and related businesses, Plantations and other strategic investments. The construction business has seen a significant growth, with Browns Engineering & Construction becoming one of the most sought-after telecom engineering companies in the country.
The construction sector businesses are showing great potential in the medium to long term with Ajax Engineers – the aluminum fabricating arm, Gurind Accor – the renowned tempered glass supplier, General Accessories – the leading powder coating services provider, and Creations Wooden Fabricators – suppliers of interior and furniture solutions for commercial purposes, complementing the overall business strategy of the construction sector with a wide range of construction related businesses. BI is also the single largest shareholder of the Sierra Group.
The plantation investment of BI, Maturata plantations, a prominent manufacturer of premium branded tea and cinnamon is performing extremely well despite the current economic crisis, recording excellent operating results.
The company owns the largest cinnamon plantation in the country and the recent investments made into this sector is now reaching the stage of harvesting and the timely acquisition of Tropical Island Commodities, a cinnamon exporting business with an established sales channel in the global cinnamon market will certainly enrich the plantation business.
On the agriculture side, BI also holds a substantial stake in Agstar PLC, the second largest fertiliser company in the country.
The plantation business in Sierra Leone, Sunbird Bio Energy Ltd. (SBSL) acquired in 201819, is now realigned and geared to produce 50Mn litres of ENA in the coming season, with the company ramping up its plantation from 5,000 hectares to reach 12,000 hectares within the next two seasons. SBSL owns the largest Bio ENA plant in the West African Region. The company also secured a further 15-year contract with the Government to export 120GWh power to the main grid at an attractive price of $ 14 cents.
In Sri Lanka, BI also owns the majority stake in the first commercial solar power plant, Saga Solar Ltd., which has a 10 MW power plant in Buruthakanda, Hambantota.