Keells Hotels do island swap in the Maldives

Monday, August 30th, 2010

The John Keells Hotels Group, losing recently in the previously profitable Maldives tourism market, has exchanged the lease of an unprofitable resort island for one that is very close to the capital island of Male’, the company announced in a stock exchange filing on Friday.

“We spent approximately USD 25 million about three years ago on developing our resort at Alidhoo Island,’’ company sources said.”We’ve exchanged the ‘head’ lease of that island for that of Dhonveli island for 18 years.’’

He explained that Dhonveli, which is only a 15 minute speedboat ride from Male’ as opposed to Alidhoo in the Northern-most atoll requiring an hour’s fixed wing aircraft flight was a far better bet for the company.

“What we are giving away is much less than what we are getting according to our calculations,’’ he said.”For us, it is a very attractive proposition.’’

The stock exchange filing said that “the transaction itself will not result in a capital gain or loss in the profit and loss statement’’ of the John Keells Hotels Group.

The tourism industry in the Maldives is now recovering compared to the comparative period the previous year which was the worst during the depression. But Alidhoo was a loss maker even in the improved situation.

No annual lease rental will also be payable on Dhonveli, the John Keells source said.

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