Business Times

Two major conglomerates in the fray to buy Golden Key Hospital

By Bandula Sirimanna

Two major Sri Lankan groups are in the fray for a tender called to sell the 11-story, state-of -the art, Golden Key Eye & ENT Hospital in Rajagiriya to pay off desperate Golden Key depositors, top officials of the two companies confirmed.

Tenders to sell the Golden Key Eye & ENT Hospital were closed on the 23rd of January and there was only a single bid from Richard Pieris Company which had quoted a price of Rs.730 million to acquire the property, official sources said.

Then Softlogic Group, a diversified conglomerate, also made an offer of Rs. 780 million after the closing date of the bids and it was accepted by the Committee of Charted Accountants appointed by the Supreme Court to handle the affairs of the defunct company, sources revealed. Chairperson - Golden Key Depositors Society (GKDS), Anusha Emmert told the Business Times that the offers made by the two companies to acquire the property are lower than the commercial value of the land with the building alone estimated at Rs.3 billion.

It is not sufficient to pay even Rs. 50,000 each for 7,200 disgruntled depositors, she added. "Therefore we depositors, cannot approve the two offers made by Softlogic and Richard Pieris. We request the authorities to sell the property to a buyer who is willing to pay at least its commercial value," she said.
According to the valuation of PricewaterhouseCoopers Lanka (Pvt) Ltd who conducted a comprehensive audit on GK assets on the directions of the Committee of Chartered Accountants, the Golden Key Eye & ENT Hospital is worth around Rs.1.25 billion. The Government valuation was Rs.750 million The Golden Key Group of Ceylinco Consolidated had made an investment of Rs.950 million for the setting up of Sri Lanka's first specialty eye and ENT hospital.

The two bids were Rs. 200 million lower than the initial investment. In September 2010, the Supreme Court endorsed the sale of the Golden Key Eye Hospital accepting the offer made by a Singapore businessmen H.O. Soo Fong at price of US$ 12.1 million (Rs.1.3 billion) subject to a bank guarantee of US$ 100,000. However the US$ 100,000 bank guarantee was not furnished by the stipulated date and the deal was off. When asked to comment on the present deal of Golden Key Eye & ENT Hospital, Head of the Accountants Committee Lakshman R. Watawala who is also a director of Arpico said that he was not involved in the tender process. The other two members Nelson Nagasinghe and Mahendra Panditha have been entrusted with the task of handling the tender. He said that he is aware about the Arpico offer but he has nothing to do with the deal.

A Central Bank official said a satellite earth station valued at Rs 500 million on a 2-acre land, a teak plantation and a tea factory owned by Golden Key would also be advertised for sale. On a previous occasion too the hospital was offered for sale and there were many offers but no finality was reached at the time.

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