Sri Lanka JKH hotel unit to raise Rs3.6bn to expand

Jan 21, 2010 (LBO) – The leisure unit of Sri Lanka’s John Keells Holdings group is making a 3.6 billion rupee cash call to spruce up its hotels and build new ones as the country expects a surge of tourists after the end of a 30-year war. The company said it was issuing 364 million new shares at 10 rupees each to shareholders in proportion of one for every three shares held.

“The proceeds of the Rights Issue will be utilised to fund the refurbishment of hotels in Sri Lanka as well as for new hotel projects and for the acquisition of land for new resort hotels,” the group said in a statement.

JKH has earlier said it was planning to invest nearly 6.0 billion rupees during the next three years to refurbish its hotels and build new ones.

It is planning a 190 room hotel in Beruwela on which design work would be finished by next April.

The hotel is expected to cost around 1.7 billion rupees, and will be a 4-star rated hotel coming under the group’s mid-market ‘Chaaya’ brand.

JKH has a 10-acre long stretch in Beruwala, after it bought land from Sri Lanka’s Confifi group next to an existing property. JKH’s Beach Hotel Bayroo, in Beruwala was damaged during the 2004 Indian Ocean Tsunami.

JKH closed its 80 room Club