Sri Lanka will proceed with the sale of shares in Canwill Holdings and continue to retain Deloitte Touche Tohmatsu LLP, India, as advisor for the transaction, the government has announced.
Cabinet Spokesperson Minister Nalinda Jayatissa said that the Grand Hyatt project requires at least Rs. 36 billion for its completion.
“About $120 million, or approximately 36 billion rupees, is needed to complete the Grand Hyatt project. The sale of shares was identified as the most suitable funding option due to difficulties in securing additional equity or debt financing to complete construction and begin commercial operations,” he said.
Canwill Holdings was established in December 2011 to invest in the tourism and hospitality sector, and is owned by Sri Lanka Insurance Corporation, the Employees’ Provident Fund, and Litro Gas Lanka.
The company owns the Grand Hyatt building in Colombo, a 47-story structure with 458 rooms and 100 serviced apartments. The building was constructed by Sinolanka Hotels & Spa Pvt Ltd, a fully owned subsidiary, under a 2012 agreement with Hyatt Hotels. Canwill Holdings also owns Helanco Hotels & Spa Pvt Ltd.
The Grand Hyatt project has faced significant delays and cost overruns, with expenditures reaching approximately Rs. 21.6 billion by late 2019. A forensic audit revealed issues such as overspending, irregular tenders, and procurement malpractices during the previous administration. Legal disputes, including a land ownership issue involving a private party, have further complicated the project’s completion
In response to these challenges, the Sri Lankan government initiated a divestiture process for Canwill Holdings. In 2023, Deloitte India was selected as Transaction Advisor for the divestiture of shares held by the Sri Lankan government in Canwill Holdings (Pvt) Ltd. (Newswire)
