Hilton Colombo opts for new financing deal from DFCC

Wednesday, 19 September 2018 00:00 - - {{hitsCtrl.values.hits}}

Via competitive bidding secures $ 30 m term loan and Rs. 500 m OD facility on more favourable terms than existing deal with BoC and Sampath Bank

Hotels Developers (Lanka) Plc last week secured a new and more favourable financing arrangement from DFCC Bank, replacing an existing deal with Bank of Ceylon and Sampath Bank.

HDL said that on 12 September it had secured a term loan facility of $ 30 million and an overdraft facility of Rs. 500 million repayable in nine and half years inclusive of a two and half years’ grace period from DFCC Bank. This was on more favourable terms than the existing $ 27 million syndicated loan and OD facility with BoC and Sampath Bank. The company has mortgaged the main property of the hotel.

“These facilities were obtained from DFCC following a competitive bidding process to secure the lowest possible interest rate, extended repayment tenor and grace period,” HDL said in a disclosure of a related party transaction to the Colombo Stock Exchange as both the company and DFCC have a common shareholder in Krishantha P. Cooray.

“It considers the transaction as not prejudicial to the interest of HDL and its shareholders. Hence the related party transactions Review Committee is not obtaining an opinion from an independent expert prior to forming its view on the transaction,” HDL added.

As of 16 September 2018, the aggregate value of HDL’s related party transactions with DFCC for the current financial year is Rs. 524 million and the full value of all related party transactions of HDL for the current financial year including the DFCC transaction is Rs. 560 million.