Written by Staff Writer
23 Oct, 2018 | 1:23 am
COLOMBO (News 1st) – The Ministry of Finance and Mass Media has issued a release, saying the government is following a transparent mechanism on the divestiture process of Hyatt and Hilton Hotels.
However, the process is still questionable. Here is why.
The Ministry of Finance and Mass Media and the Ministry of National Policies and Economic Affairs published an advertisement, calling for ‘expressions of interest’ for the Hyatt and Hilton Hotels. The advertisement said that the EoIs will have to be submitted before October 31.
News 1st raised two questions regarding this;
1. The investors have got only 9 working days to submit their EoI’s.
2. Was an investor already selected to hand over the two hotels?
Today (October 22), the Finance Ministry issued a statement, a rather lengthy one, on the topic.
Via the EOI advertisement placed, interested parties have to indicate their business, financial strength and which hotel asset they have an interest in purchasing.
When they contact the financial advisers, the investors will be sent a simple one-page format to fill out basic information about themselves and information on the hotels that are non-confidential will be given to them.
If investors need more time to respond to the one-page format, they can request for this. Therefore, the expression of interest does NOT require a priced bid.
Why this is being done this way is that both hotels are governed by management agreements with Hilton and Hyatt International hotel management companies and these agreements have confidentiality clauses, which restricts the hotel owning companies from releasing sensitive commercial information.
It is for this reason that parties who express interest will be first shortlisted and then bound to sign a Non-Disclosure and Confidentiality Agreement.
Only after this is signed will the interested investors be given more than 100 pages of detailed financial and other information and given access to a security controlled data room.
It is after this that the transparent bidding process will start under the supervision of the relevant Cabinet appointed committee, where prospective investors will have ample time over several months to prepare financial bids and bid conditions.
Though the explanation has been provided by the Ministry of Finance, is it practical? Here are a few examples;
There are several more examples of this nature during the past 3 years. Will a similar fate befall Hilton and the Hyatt hotels?
The people are watching.
EPF and other public funds worth over Rs. 500 Million has been wasted by a group including the former President’s Chief of Staff Gamini Senarath at the Hyatt Hotel. In a backdrop where a court case is ongoing into the matter, we reiterate:
21 Apr, 2021 | 08:02 AM
21 Apr, 2021 | 12:03 AM
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