Mar 10, 2011 (LBO) – Sri Lanka’s Hotel Developers, a listed firm which owns the building on which Colombo Hilton is operated said a land sub-leased from a private party had been taken over by the state. The state land on which the building was put up has been sub-leased from Cornel and Company, a private firm, in 1984 in return for equity, Hotel Developers said in a filing, responding to an inquiry from Colombo Stock Exchange.
Cornel and Company had leased the land from Sri Lanka’s Urban Development Authority (UDA), a state agency. The firm was expected to pay the lease to the UDA.
Hotel Developers said the UDA had repudiated the lease since rentals had not been paid from 1987 and the land had reverted back to the state.
The firm did not say whether it will have to pay rentals to the state or issue fresh stock or if there are any material effect on the company.
The stock closed at 135.80 rupees, up 5.80 Thursday.
Hilton Hotels and Resorts in a separate statement said they will continue to manage the hotel and are expecting to have talks with the state.
The statements came after Sri Lanka’s economic development minister told parliament on Wednesday that that the Hilton prop