Hilton Colombo owner demystifies Govt. takeover

Friday, 11 March 2011 01:54 - - {{hitsCtrl.values.hits}}

Hotel Developers (Lanka) Plc (HDL) the owning company of Hilton Colombo yesterday demystified the sudden announcement of the Government takeover of the country’s premier five star.

It said that the Hilton hotel stands on state land which was granted to the Urban Development Authority (UDA) by special grants dated on 21 October, 1981 and 12 December, 1979. The UDA leased a portion of the land to the Cornel and Company Ltd (CCL) in 1984 for a period of 99 years who in turn sub-leased the land to HDL in 1984 for a period of 99 years.

In terms of agreement reached between HDL and CCL, the former issued shares to the latter to the total value of the rent payable for the period of lease in lieu of the rent payable and in consideration of such settlement CCL agreed and undertook to pay to the UDA the required lease rentals as and when they fell due.

The UDA has taken up the position that CCL has failed to pay the lease rentals as required since 1987 thereby repudiating the lease agreement. Therefore the UDA had surrendered the special grant deeds under the State Land Ordinance and released to the Republic of Sri Lanka all its interest and right in the land.

“In terms of the document dated 28 February, 2011 possession of the land in accordance with the relevant Survey Plan was handed over by the UDA to the Republic of Sri Lanka,” said the statement issued by Corporate Advisory Services Ltd, the Secretaries to HDL on behalf of the Board.

The statement also added that the day to day operations and functions of the Hilton Hotel are continuing as usual.

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