EOIs to be called first for Hilton Colombo, Lanka Hospitals, Hyatt

SOE Restructuring Unit Director General Suresh Shah – Pic by Lasantha Kumara

The Government is to call for Expression of Interests (EOIs) first on Hotel Developers Lanka Ltd., owning company of Hilton Colombo, Lanka Hospitals Corporation PLC and Canwill Holdings Ltd. (Hyatt) whilst for others it will be later.

The timeline for EOIs was announced yesterday by State Owned Enterprises Restructuring Unit (SRU) Director General Suresh Shah during a presentation to the media involving Treasury Secretary Mahinda Siriwardena and Central Bank Governor Dr. Nandalal Weerasinghe.

“The Request for EOIs for Hilton, Hyatt and Lanka Hospitals will be out shortly and for the others within the next five weeks,” Shah said.

He also said that the first round of divestitures is planned for the first quarter of next year and others during the second quarter.

Previously expectations among the private sector were that the initially selected SOEs will be divested by the end of this year.

The other entities are Sri Lanka Insurance Corporation Ltd. (SLIC), Sri Lanka Telecom (SLT), Litro Gas Ltd. (Litro, including Litro Gas Terminals Ltd.) and SriLankan Airlines.

According to SRU, the country has over 130 what it described as Public Commercial Business (PCBs) as opposed to SOEs. Of those, around 85 do not need state ownership and 15 could be wound up, both subject to final clearance by the Cabinet. The rest could remain under state control, Shah added.

The transaction advisors for the SOEs tipped to be first off the block are Deloitte Touche Tohmatsu India (Deloitte India) for Hyatt, and Colliers International Consultancy and Valuation (Singapore) Ltd. and Platinum Advisors for Hilton Colombo.

Deloitte Touche Tohmatsu India (Deloitte India) are also transaction advisors for Litro Gas Ltd. (Litro, including Litro Gas Terminals Ltd.) whilst for Sri Lanka Insurance Corporation Ltd. (SLIC) it is Alvarez & Marsal Middle East Ltd., and Capital Alliance Partners Ltd.

International Finance Corporation (IFC) a member of the World Bank Group is advising the divestiture of Lanka Hospitals Corporation PLC., Sri Lanka Telecom and SriLankan Airlines.

To ensure transparency in the divestiture process, prospective investors will be invited to express interest (EOI) via advertisements to be published in both the local and international press.

Investors shortlisted via the EOI process will be provided access to data rooms populated with information necessary for a comprehensive due diligence. Thereafter such investors will be requested to submit both technical and financial proposals in response to a Request for Proposals (RFP).

Shah said these divestitures are expected to contribute towards sustainable economic growth and a more competitive economy whilst better safeguarding citizens’ interests.