Browns Beach to delist from CSE, offers Rs. 30 exit price

Tuesday, 20 January 2026 02:48 - - {{hitsCtrl.values.hits}}

Browns Beach Hotels PLC has proposed to delist its shares from the Colombo Stock Exchange (CSE), offering minority shareholders Rs. 30 per share citing sustained losses, a weak outlook for profitability, and continued non-compliance with listing requirements.

Browns Beach closed yesterday unchanged at Rs. 23.20. The company reported net liabilities of Rs. 6.10 per share as of end-September 2025. Its public float was 9.09%, while Melstacorp PLC was the top shareholder with a 41.88% stake, followed by Aitken Spence Hotel Holdings with 36.62%.

The Board of Directors of Browns Beach Hotels PLC yesterday resolved to seek a voluntary delisting, subject to obtaining shareholder and regulatory approvals, according to a disclosure to the CSE.

Explaining the decision, the company said it had recorded sustained losses since 2019 due to prolonged challenges faced by the tourism industry, including the Easter Sunday attacks, the COVID-19 pandemic, and the subsequent economic crisis. It said revenue generated over the last two years had been insufficient to offset these losses.

The company also noted that its shares were transferred to the Watch List on 1 August 2024 following an Emphasis of Matter on “Going Concern” in the auditors’ report for the financial year ended 31 March 2024. If unresolved within the prescribed 15-month period, the company faces a trading suspension, followed by mandatory delisting if the suspension extends beyond 12 months.

Management said projected revenue over the next few years would be inadequate to resolve the “Going Concern” issue within the stipulated timeframe, adding that there were no indications of an improvement in the company’s net asset position, which remains negative. As a result, the company said it was also unlikely to declare dividends for a prolonged period.

Browns Beach Hotels further disclosed that it is not in compliance with the minimum public holding requirement. While various options were evaluated to rectify the non-compliance, the Board said implementing such measures was not viable in the current economic environment.

In connection with the proposed delisting, arrangements have been made with majority shareholders Melstacorp PLC and Aitken Spence Hotel Holdings PLC to purchase shares held by minority shareholders who wish to exit. An exit offer price of Rs. 30 per share has been proposed, which the Board said it considers fair and reasonable.

The exit price was determined in accordance with Delisting Rules, based on an independent valuation carried out by BDO Partners. The valuation showed an intrinsic value of negative Rs. 19.31 per share based on Discounted Cash Flow, Rs. 20.89 based on an Enterprise Value to EBITDA multiple, and a volume-weighted average price of Rs. 18.58 over the year immediately preceding the valuation.

The proposed delisting is subject to approval by shareholders at a General Meeting in accordance with the Listing Rules and the subsequent approval of the Securities and Exchange Commission of Sri Lanka.