Amaya Leisure expands footprint to east coast with Rs. 563 m investment

Friday, 2 May 2014 03:00 - - {{hitsCtrl.values.hits}}

In addition to management rights buys 51% stake in owning company of former Centara-managed 125 room resort in Passikudah
Business leader Dhammika Perera to expand overall room strength of his leisure companies from around 850 at present by a further 1,200 in medium term including in Mirissa and Nuwara Eliya

Amaya Leisure Plc has expanded its footprint to the popular east coast, acquiring control and management of a former Centara-managed 125-room resort in Passikudah with an investment of Rs. 583 million. The strategic deal was struck with the owning company of the new five star property – Suntan Beach Resorts Ltd. (STBR), formerly controlled by entrepreneur Mohan Tissanayagam. Post acquisition by Amaya, Tissanayagam holds around a 30% stake. The acquisition by Amaya is via a share purchase followed by a subscription to a Rights Issue. Thailand based Centara Hotels & Resorts managed the hotel when it opened in early last year. In a brief filing to the CSE on Wednesday, Amaya said it has invested Rs. 499.4 million in the equity stake of 45% in Sun Tan Beach Resorts Ltd. It further acquired an equity stake of 6% for a consideration of Rs. 63.9 m in the same company, totalling equity stake to 51%.

Hardy Jamaldeen, Director of Steradian Capital, the advisor to Sun Tan Beach Resorts Ltd., told the Daily FT that Amaya lacked a beach resort and this partnership would enable Amaya to market a full spectrum of rooms across the island to its clients. “The deal synergies are to be achieved through Amaya’s national presence and ability to market such properties in Sri Lanka. Amaya Leisure PLC has been producing record-breaking occupancy levels and maintaining the highest gross profit margins in the sector. Through its experience and expertise Amaya will be able to improve services and bring about efficiencies to this very well designed and built 5-star hotel. The team is confident of increasing footfall to the Passikudah region,” Jamaldeen added. Business leader Dhammika Perera-controlled Hayleys owns a 51% stake in Amaya Leisure Plc and further stakes via related parties.

Jamaldeen said Perera’s commitment to Sri Lanka’s leisure sector has been further endorsed by this transaction. Dhammika currently has controlling interests in The Kingsbury Hotel, Fortress Resort & Spa, Amaya Leisure PLC, Hunas Falls. The combined room strength of this suit of hotels is around 730. Jamaldeen said Dhammika is also planning to add a further 1,200 hotel rooms via projects in Colombo, Negombo, Mirissa and Nuwara Eliya. Despite the exit from the east coast, Centara is on course in managing the first southern property in Bentota scheduled to be open later this year. The 165-room Centara Ceysands Resort & Spa Sri Lanka is owned by Softlogic Holdings Plc.