John Keells Hotels PLC (KHL) is raising funds through a rights issue to expand and improve its portfolio of hotel rooms and related services to meet the expected increase in demand for 3 to 5 star hotel rooms in the country with the anticipated growth in tourist arrivals. In a circular to shareholders this week, KHL stated that Club Oceanic has already been closed for refurbishment and expansion of the hotel.
In November 2009, the company through a subsidiary, acquired four acres of land next to the former Hotel Bayroo forming a contiguous block of 10 acres on the prime Beruwala beachfront on which it plans to construct a new 190-room hotel.
The company further stated that it is evaluating other new hotel projects as well as the refurbishment of some of the existing hotels in its portfolio. KHL may also acquire land for its hotel projects.
The circular was issued to announce a rights issue of 364,036,695 new ordinary shares at Rs.10 per share.
According to the circular, it is anticipated that the funds raised through the rights issue would be utilized over a three year period with 20% for the refurbishment of existing hotels, 65% for new hotel projects and 15% allotted for the acquisition of land.
An Extraordinary General Meeting (EGM) is set for March 1, 2010 for the requisite resolution to give effect to the rights issue. |
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