Govt. to hold pre-EOI meeting ahead of Canwill Holdings divestiture

• Plans divestment of 100% stake in highly controversial venture, with virtual pre-EOI meeting slated for 21 Jan. 
• Process to begin two-stage competitive transaction with local and foreign investors
• Deadline for EOIs set for 16 Feb.
• Earlier attempt at divestiture was in 2024, with six firms showing interest
• Includes stalled project that was intended to be Grand Hyatt Colombo

The Finance Ministry will hold a pre-Expression of Interest (EOI) meeting with interested parties ahead of the proposed divestiture of Canwill Holdings Ltd., the parent company of Sinolanka Hotels & Spa Ltd., and Helanco Hotels & Spa Ltd., which includes the stalled Grand Hyatt venture.

The Government announced on 24 December 2025 its intention to divest its entire shareholding in Canwill Holdings as part of its ongoing State-Owned Enterprise (SOE) reform and divestment program.

The pre-EOI meeting will be held virtually on 21 January at 12 p.m. IST. Interested parties have been invited to participate in the meeting to obtain clarifications and raise queries relating to the Request for EOI and the proposed transaction.

The divestiture is to be carried out through a two-stage competitive process, beginning with the invitation of EOIs from eligible local and international investors. 

The Ministry said interested parties may access the Request for EOI document through its official website.

The notice stated that non-attendance at the pre-EOI meeting will not be a cause for disqualification from submitting an EOI. The deadline for submission of EOIs has been set for 16 February.

Canwill Holdings was incorporated in December 2011 to invest in the hospitality and tourism sector and operated as a holding company controlling its subsidiaries. It was the parent of Sinolanka Hotels & Spa Ltd., and Helanco Hotels & Spa Ltd., Sinolanka was developing a 47-storey hotel and serviced apartment project in Colombo 3, comprising 458 hotel rooms and 100 serviced apartments, built to Grand Hyatt specifications. 

The structure and façade of the building were largely complete, with substantial capital expenditure already incurred, and most approvals and planning required for completion in place. The project had been designated a Strategic Development Project, making it eligible for tax concessions during both implementation and commercial operations.

Helanco Hotels & Spa held 9.42 acres of beachfront land in Hambantota earmarked for the development of a luxury beach resort. Helanco had entered into a hotel management agreement with Hyatt International – Southwest Asia Ltd., in March 2014 to operate the property as a Hyatt Regency resort, although construction had not commenced and the agreement had since expired. 

Canwill Holdings was a fully SOE that had received Rs. 18.5 billion in equity funding, sourced from Sri Lanka Insurance Corporation, Litro Gas Lanka, and the Employees’ Provident Fund (EPF). Sri Lanka Insurance held 46% of the shares, with the balance divided between Litro Gas and the EPF. The funds were invested in Sinolanka and Helanco to develop the Colombo and Hambantota hospitality projects, respectively.

A forensic audit conducted in 2015 uncovered extensive irregularities and cost overruns, with initial estimates for the Colombo hotel more than doubling and a significant funding shortfall emerging. The audit highlighted procurement lapses, governance failures, and unauthorised payments, prompting the Board at the time to renegotiate and cancel contracts, recover savings, and refer findings to law enforcement authorities. Despite these issues, the management and profit-sharing agreement with Hyatt was not found to have regulatory or contractual irregularities.

The current divestiture process follows earlier efforts to exit the Government’s investment in Canwill Holdings. In 2024, six companies, largely from India, were pre-qualified to submit Requests for Proposal to acquire the company. The then SOE Restructuring Unit said the EOIs were evaluated in line with the terms of the Request for EOIs and in compliance with the Special Guidelines on Divestiture of SOEs approved by the Cabinet of Ministers in July. The evaluation and short-listing were carried out by a Cabinet-Appointed Special Project Committee and a Special Cabinet-Appointed Negotiating Committee. Deloitte India was appointed as transaction adviser for the divestiture of the Government’s stake in Canwill Holdings.