Jan 17, 2013 (LBO) – Sri Lanka’s Hotel Services (Ceylon) Plc, has sought shareholder approval to increase borrowings after the cost of renovating its ‘The Kingsbury’ branded property escalated. Following design changes which required an additional 600 million rupees the cost escalated to 2.4 billion rupees. The renovation had also involved replacing its older mechanical and electrical systems giving energy savings.
Hotel Services owns Sri Lanka’s oldest five star hotel, first operated by the Inter Continental chain. The Kingsbury has been renovated to have a British Colonial period style. The hotel is located in the Colombo’s colonial quarter.
The company had funded a 2.4 billion rupee renovation and expansion with a 1.3 billion rupees term loan arranged in December 2012 and short term loans, the company said in a circular to shareholders.
A second loan of 1.3 billion rupees or its US dollar equivalent was being negotiated to settle short term borrowings. The directors told shareholders another 235 million rupees would be needed for working capital increasing proposed borrowings to 1.53 billion rupees.
The company’s articles of association limited borrowings to 50 percent of a