Sri Lanka city hotel deep in red

Jan 24, 2012 (LBO) – Galadari Hotels (Lanka) Plc, a hotel in Sri Lanka’s capital Colombo said it lost 199.6 million rupees in the December 2011 quarter against a profit of 35.4 million rupees a year earlier, hit by an exchange loss. Galadari has 9.1 billion rupees in accumulated losses and 1.3 billion rupees in net assets.

The firm’s long term debt is over four times its net assets at 6.2 billion rupees. It building and leased land it valued at 7.6 billion rupees and its latest revaluation has not been incorporated, the firm said.

The firm has said a debt to equity swap is being planned.

The hotels second largest shareholder with a 13 percent stake is the Employees Provident Fund, a retirement fund of private sector worker money managed by the state.

The purchase of the troubled hotel by the EPF has caused much controversy.

Revenues rose 16.2 percent to 373 million rupees and cost of sales rose at a slower 12.9 percent to 72.3 million rupees, allowing gross profits to increase 17 percent, unaudited accounts filed with the Colombo Stock Exchange said.

Sri Lanka has seen a tourism boom after the end of a 30-year war in 2009 and arrivals rose over 30 percent in 2011.

The firm was hit by a 191 mill