Jetwing to raise Rs. 5 bn. equity through private placement & an IPO
Jetwing Chairman Hiran Cooray
The Jetwing Group, one of the country’s biggest resort hotel and travel operators now investing big bucks in upgrading its old hotels to sparkling five-star standards, plans to raise Rs. 5 billion equity capital by a private placement to be followed by an IPO.
“The private placement will be concluded this year,’’ Jetwing Chairman Hiran Cooray said in an interview last week. “The IPO will follow. We’re already getting inquiries about the private placement.’’
Asked whether there will be differential pricing between the privately placed shares and those offered to the market, he responded with a firm “No.’’
Jetwing on Friday unveiled Jetwing Blue, Originally the Blue Oceanic Hotel in Negombo where a Rs. 850 million refurbishment has been completed. It’s virtually a new hotel built on the original property by the late Mr. Herbert Cooray, the company’s founder, who entered the hotel business in 1973 with a small six-room hotel in Negombo.
Jetwing today runs a dozen hotels in Sri Lanka and one in Auckland, New Zealand. The company also manages two hotels in Vietnam and Laos. Besides John Keells and Aitken Spence, it is the biggest hotelier in the country with 530 rooms in Sri Lanka.
The group’s various hotels are owned by different companies which at the end of the last financial year grossed a turnover of Rs. 4 billion indicating the size of the business.
While its core is in Negombo with four hotels, Jetwing is strategically located elsewhere too – it runs Lighthouse in Galle, manages Tangalle Bay, manages Era Beach in Talpe, owns St. Andrew’s in Nuwara Eliya, has a boutique hotel, Warwick Gardens on an estate in Ambewela near Nuwara Eliya, runs Jetwing Vil Uyana near Sigiriya and Hunas Falls, the country’s leading honeymoon hotel, at Elkaduwa near Kandy.
Cooray said that planned investments include Rs. 600 million at Blue Lagoon in Talahena (near Negombo) with an additional Rs. 250 million invested in building eight villas there plus Rs. 1.5 billion to be invested in Yala Safari lost in the tsunami where a 98-room property will be built.
What inspired Herbert Cooray to concentrate on Negombo. “My mother is from Dankotuwa,’’ says his son. “We used to go through Negombo frequently to visit our grandparents. That might have kindled his interest. Then of course there was his friendship with Mr. Gem Milhuisen who built the country’s first Geoffrey Bawa designed hotel (Blue Lagoon) there.’’
Does Cooray foresee difficulty staffing the plethora of new hotels now being built or in the pipeline?
“A lot of our people who went off to the Middle East and elsewhere are coming back or planning to do so,’’ he said. “That would help ease the short term problem. Also young graduates are now looking at the hotel industry as prospective employers. That wasn’t the case before.’’
He explained that the last batch of management trainees recruited by Jetwing were all graduates, not necessarily in hoteliering. Previously hardly any graduate applied for hotel jobs. He was confident that supply would catch up with demand in the course of time.
Source: http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=28639
