Lanka Hospitals, Canwill and Hotel Developers Lanka: Prequalified bidders to engage in due diligence
The Morning: The prequalified bidders for the divestiture of the Treasury’s stake in Lanka Hospitals PLC, Canwill Holdings Ltd., and Hotel Developers Lanka Ltd. have been selected, according to the State-Owned Enterprise Restructuring Unit (SOERU) of the Ministry of Finance, Economic Stabilization, and National Policies.
Speaking to The Sunday Morning Business, Ceylon Tobacco Company PLC (CTC) Chairman and SOERU Head Suresh Shah revealed that the selected prequalified bidders for the divestiture of Lanka Hospitals, Canwill Holdings, and Hotel Developers Lanka would be commencing their due diligence process in the upcoming days.
“The selected prequalified bidders have to now do their due diligence. There are data rooms that have been created for this purpose. Thereafter, they will be given a Request for Proposal (RFP) document, based on which they will have to send their proposal,” he stated.
Commenting further, he stated that the due diligence process was expected to start any day now and that the selected prequalified bidders would be given 60 days to carry out their due diligence. Thereafter, they will have to submit their proposal to the RFP document which will be issued in about 10 days.
In 2023 the Government commenced the process of divesting the Treasury stake in Sri Lanka Insurance, Litro Gas Lanka, Litro Gas Terminal, Sri Lankan Airlines, Lanka Hospitals, Canwill Holdings, and Hotel Developers Lanka.
According to the disclosure published by the Treasury, the relevant Request for Quotations (RFQs) and Expressions of Interest (EOIs) processes had commenced for all entities except Sri Lanka Insurance, Litro Gas Lanka, and Litro Gas Terminal.
The delay in relation to these institutions is possibly due to the inherent complexities involved with them, as Sri Lanka Insurance will have to unbundle its life and general insurance businesses according to the law.
Similarly, it has been reported that the Government is considering unbundling Litro Gas Lanka Litro Gas Terminal as well.
In terms of Section 53 of the Regulation of Insurance Industry (Amendment) Act No.3 of 2011, it was made compulsory to segregate the life and general insurance businesses of all composite insurance companies into two separate entities on or before February 2015.
Accordingly, all composite insurance companies segregated their life and general insurance businesses into two separate entities. The only exceptions were SLIC and MBSL Insurance Company Ltd. In the case of MBSL Insurance Company, it stopped underwriting new life insurance business from 1 June 2020 onwards.
Sri Lanka’s ongoing programmed to restructure state owned enterprises (SOEs) has presented many new business/investment opportunities to foreign businesses/investors interested in doing business in Sri Lanka. The country is on a growth path with an expansion in the overall economy and Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed with other countries have all helped with the overall growth. These facts have resulted in the expansion of business/investment opportunities in all key economic sectors in the country. It is in such a backdrop that the government of Sri Lanka had introduced an SOE restructuring programmed to divest the institutions opening up new opportunities for foreign businesses/investors. The interest shown by foreign businesses/investors in these SOEs is a clear indication of the business potential in this programmed. Opportunity Sri Lanka provides consultancy/facilitation for foreign businesses/investors looking at investing in the key SOEs that have been put up for divestiture.
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