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“The company is confident that it has the necessary resources to complete construction of such development by June 2017 and is of the view that it would be commercially viable to have such an Ayurveda and Spa resort as a stand-alone hotel in Kalpitiya,” the Company said in a circular to shareholders. The company says that it will “dove-tail” this development into a development akin to what is set out in the prospects, in the event the government and the tourism authorities come up with a definitive plan and a timeline for a Kalpitiya development.
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The company adjourned its extraordinary general meeting which was to be held on 08 May to 19th June this year, seeking approval for the implementation of the alternate plan of action set out herein. The EGM which was supposed to be held 08 May was postponed by another month, on a directive of the Securities watch dog, saying the move was made to enable the Company to come up with a precise direction on the future course of action on how the Company proposes to safeguard the minority shareholder interests prejudiced by the delays caused in constructing the resort hotel, Citrus Kalpitiya. In 2011, Kalpitiya Beach Resort raised 283.
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5 million rupees from an initial public offering stating that the funds will be utilized partly to finance a construction of a resort hotel in Kalpitiya and vowed to start commercial operations early this year. However the company failed to construct a hotel in the property and blamed the former government saying that the hotel project was held back due to past regimes’ incompetency to attract occupancy and build tourism infrastructure in Kalpitiya.
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In the recent circular the company says, “.... the company intended to commence the Citrus Kalpitiya Project in light of the then, well publicized plan of the government of Sri Lanka and Sri Lanka tourism development authority, to develop Kalpitiya as major tourist hub titled “Kalpitiya integrated tourism resort project,” “It is in that context the company sought funds in its IPO to develop a hotel within such an integrated resort complex,” “The company was compelled to delay the construction of the hotel in light of the delay in the aforesaid development of the Kalpitiya region and in the absence of a clear direction from the government of Sri Lanka, Tourism Development authority as to when such development would take place.” The company also says that the shareholders would appreciate the proceeding with the construction of a hotel while disregarding the aforementioned changes in circumstances would certainly have resulted in a considerable loss to all shareholders of Kalpitiya Beach Resort Plc.