New BOI company launched to bailout failed local hotels in partnership with Singaporean investors

By Hiran H.Senewiratne

A new BOI- approved company, Lankalia Pvt. Ltd, was launched recently to bailout and re-launch defunct and non-profitable tourism and leisure sector assets in Sri Lanka with the participation of Singapore investors.

“We have initially invested over UD$ 5 million and restarted some of the top hotels that were shut down due to the pandemic and financial issues, said partner Lankalia Pvt Ltd., Andrew Lee, who is also director of Ambrosia Ltd of Singapore and a majority stakeholder of Blue Diamonds Ltd.

Lee said that they are optimistic that the Sri Lankan tourism sector would rebound earlier than expected. “SriLankan Airlines has also resumed flights to China, while other airlines have increased frequency and an influx of Chinese tourists too are expected. We studied that to meet this projected demand the local hotel rooms are not going to be adequate and several have been shut down and our aim is to revive them and get them operational, he said.

He added that some of the hotels are unable to service their debt and “we came forward to bail them out, providing capital and enabling them to get back to business again.”

Chairman Lankalia Pvt. Ltd, Dhakshitha Bogollagama said that their focus is on small luxury boutique hotels and they have already provided capital for four hotels; three in the South and one in Anuradhapura, and these hotels, which were virtually shut down, will start operating in a few days’ time.

He explained that these hotels are mostly single owner hotels but were in huge debt and they stepped in and bailed them out, providing them credit. “This would be at a far lower rate than the present market interest rate.”A Singapore consortium partner provides them seed capital for this process.