Keells to manage Confifi Hotels

Consequent to a discussion and agreement between John Keells Hotels PLC and the Confifi Group, KHL has announced voluntary offers to acquire 100% of the issued shares of each of the three listed hotel companies operated under the Confifi Group, namely, Riverina Hotels PLC (Riverina), Eden Hotel Lanka PLC (Eden) and Confifi Hotel Holdings PLC.

The acquisitions would be in the form of a share swap whereby Keells would issue its own shares as consideration.

All offers are conditional to KHL obtaining approval at an Extraordinary General Meeting of its shareholders, KHL

 receiving acceptances for a minimum of 50% plus one share of the issued share capital of Confifi and The Boards of Riverina, Eden and Confifi agreeing to terminate the existing management contracts with Confifi Management Services Limited (CMS) without compensation, and appoint Keells Hotel Management Services Limited as managing agent, to become effective from the date of the three voluntary offers being declared unconditional as to acceptance by KHL.

The Boards of Riverina, Eden and Confifi must agree to allow KHL a majority representation on their respective Boards, to become effective from the date of the three voluntary offers being declared unconditional as to acceptance by KHL.

Confifi Management Services Limited (CMS) has agreed to accept the voluntary offers made by KHL in respect of all shares held by CMS in Riverina, Eden and Confifi at the respective swap ratios.

CMS has agreed to terminate without compensation the current management contracts between CMS and each of Riverina, Eden and Confifi subject to receiving approval from the respective boards, to become effective from the date of the three voluntary offers being declared unconditional as to acceptance by KHL.

KHL has also offered to purchase the land in Beruwela owned by Confifi Beach Hotel for Rs. 148.4 million subject to title clearance, based on a valuation by Chartered Valuation Surveyor, P.B. Kalugalagedera in a report dated January 31, 2006.

The acquisition would complement KHL’s existing portfolio of hotels and strengthen its presence in the southern coastal belt of Sri Lanka.

The three Confifi hotels stand to benefit from KHL’s strong sales and marketing network and would reap operating synergies from being part of a larger group of hotels Chairman of KHL, Susantha Ratnayake said.

Chairman of CMS, Prof. M.T.A. Furkhan said the shareholders of the three Confifi Hotel Companies in addition to continuing to enjoy the benefits of the operations of the three hotels, also stand to gain by the synergy resulting from the combination of the Confifi Group hotels and the local and overseas operations of John Keells Hotels.