Government revives Hyatt divestiture amid Apartment buyers’ concerns
The government’s decision to move forward with the divestiture of the long-delayed Grand Hyatt Colombo project, reappointing Deloitte as the transaction adviser, has revived hopes for completion but also deepened uncertainty among investors, state institutions, and apartment buyers still waiting for answers more than a decade after construction began.
Under the new administration’s directive, Deloitte will prepare an Information Memorandum (IM) detailing Canwill Holdings’ financial position, liabilities, and pending claims, including those of apartment purchasers, a senior official of the Finance Ministry said.
Once the IM is finalised, the ministry will invite Expressions of Interest (EOIs) from potential investors capable of completing and operating the hotel.
For apartment buyers, however, the future remains deeply uncertain. Many paid deposits or instalments years ago in anticipation of owning luxury residences within the Hyatt complex.
Yet, no verified public record discloses the number of apartment buyers or total funds collected. Without clear escrow protection or legal safeguards, these individuals risk being treated as unsecured creditors in the divestiture process.
Legal experts stress that their contracts and payment records must be recognised in any new ownership agreement to prevent further losses. Meanwhile, institutional stakeholders such as Sri Lanka Insurance and Litro Gas face mounting pressure to recover their investments.
The Auditor General’s 2023 report identified accounting irregularities within Canwill Holdings, including a Rs. 2 billion share issue discrepancy, underscoring the need for stronger governance and transparency.
Official reports indicate that completion of the project currently would require a further US$ 120 million (approximately Rs. 36 billion). Citing financial constraints, the previous government had opted to sell its 75 per cent stake in Canwill Holdings to a strategic investor.
Earlier audits and parliamentary reviews reveal that Rs. 18-21 billion in public funds have already been invested by the state-owned shareholders, making it one of the most expensive and delayed developments in Sri Lanka’s real estate history.
Economists view the divestiture as a pragmatic step to unlock completion but caution that it must also deliver justice to affected stakeholders.
The luxury hotel and serviced apartment complex was originally launched in 2006 by the now-disbanded Ceylinco Group with the Grand Hyatt-branded hotel set to feature 47 storeys, 458 hotel rooms, and about 84 to 100 serviced apartments. However, the collapse of the Lalith Kotelawala-led financial empire following the Golden Key credit card scandal in late 2008 brought the development to a halt.
After the fall of the Ceylinco conglomerate, the then government took over the property in 2012, transferring control to Canwill Holdings (Pvt) Ltd, jointly owned by Sri Lanka Insurance Corporation, Litro Gas, and the Employees’ Provident Fund (EPF).
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