Sunday Feb 22, 2026
Sunday Feb 22, 2026
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Fitch Ratings has assigned Aitken Spence Hotel Holdings PLC a first-time National Long-Term Rating of AA+(lka) with a Stable Outlook, citing strong support from its parent alongside risks stemming from its exposure to the Maldivian economy.
In a rating action commentary issued yesterday, Fitch Ratings said the rating reflects high operational and strategic incentives for support from parent company Aitken Spence PLC, under its Parent and Subsidiary Linkage criteria, although legal incentives were assessed as low.
Fitch assessed Aitken Spence Hotel Holdings’ Standalone Credit Profile at AA-(lka), supported by cash flow from its hotel portfolio of 15 owned and four managed properties, mainly in the Maldives and Sri Lanka, together with low leverage and adequate funding access. These strengths were partly offset by the company’s high exposure to the weakening Maldivian economic environment.
The rating agency also assigned a National Long-Term Rating of AA(lka) to the company’s proposed senior unsecured debentures of up to Rs. 5 billion. The debentures are rated one notch below the issuer rating due to subordination to secured bank debt, which accounts for the majority of the company’s borrowings. Proceeds are expected to be used to settle existing bank debt, repay amounts due to Aitken Spence PLC and fund capital expenditure.
Fitch said Aitken Spence Hotel Holdings contributes around 65% of Aitken Spence PLC’s EBITDA and over 50% of group assets over the medium term. It expects the hotel group’s EBITDA to grow at a compound annual rate of about 10% between the financial years ending March 2026 and March 2029, driven by refurbishment-related capital expenditure, higher room rates and improved margins. The company’s US dollar-pegged cash flows were also cited as providing operational and financing flexibility during Sri Lanka’s recent economic crisis.
Operational incentives for parent support were assessed as high, reflecting board and management overlap and a shared brand, while legal incentives were deemed low as guaranteed debt is expected to decline over time. Fitch noted that Aitken Spence PLC had provided intragroup liquidity support, including advances of Rs. 2.7 billion to the hotel subsidiary as at the end of the financial year 2025.
Fitch also factored in indirect support from ultimate parent Melstacorp PLC, which owns 51% of Aitken Spence PLC. While Melstacorp’s strategic incentives to support Aitken Spence PLC were assessed as medium, Fitch expects support to flow through the group if required, given the hotel business’ contribution to overall earnings.
Hotel operations remain the primary cash flow driver, with the Maldives accounting for about 70% of Aitken Spence Hotel Holdings’ EBITDA. Fitch expects tourist arrivals to the Maldives to grow by mid-single digits in 2025, following 9% growth in 2024, supported by recovering demand from China and Russia. EBITDA margins are forecast to average around 25% over the period from FY26 to FY29.
However, Fitch highlighted a cash flow and debt mismatch, as most earnings are generated in the Maldives while borrowings are largely with Sri Lankan banks. This exposes liquidity to potential tightening of Maldivian currency regulations in the event of sovereign stress. While recent foreign currency conversion requirements in the Maldives exempt businesses with offshore debt servicing needs, Fitch said risks remain over the rating horizon.
Despite higher refurbishment-related capital expenditure, Fitch expects leverage to remain moderate, with EBITDAR net leverage forecast at 2.5 times by the end of FY26 and 2.9 times by FY27. Capital expenditure is expected to rise to around 11% of revenue in FY26 and 13% in FY27, funded through a mix of new debt, operating cash flow and existing cash balances.
As at the end of FY25, Aitken Spence PLC held a cash balance of around Rs. 43 billion, including Rs. 10 billion at the hotel subsidiary level. Fitch said this, together with forecast free cash flow and strong access to domestic banks, supports upcoming term loan repayments and the rollover of short-term working capital facilities.
Aitken Spence Hotel Holdings owns and manages hotel properties in Sri Lanka, the Maldives, India and Oman, with an inventory of over 2,600 rooms across its portfolio as at FY25.
