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Aug 20, 2011 (LBO) - Sri Lanka's listed Asia Capital, which has interests in financial services, leisure, will invest 700 million rupees in hotels and plans to take two operating units public in the next two years, an official said.
Asia Capital got 3.3 billion rupees after selling out of Asian Alliance Insurance.

"We sold our stake in Asian Alliance because we got the right price at the right time, at the time the investment matured," acting chief executive Stefan Abeyesinhe said.

The firm is planning to invest around 1.5 billion rupees in expanding its businesses, including hotels.

Asia Leisure, the group's leisure arm, plans build at least three luxury boutique hotels in Kalutara and Balapitiya in the Southwestern coast and in Trincomalee in the East.

"We are planning to invest around 700 million rupees for these hotel projects," Abeyesinhe said.

"We have already acquired one acre of land in Balapitiya and Trincomalee and is also looking for land in Kalutara and northern Jaffna."

Each hotel will include around 35 to 40 rooms. The group is planning to list the hotel unit within two years Abeyesinhe said.

Asia Leisure now operates four luxury boutique hotels: Park Street Hotel in Colombo, River house, Balapitiya, Tamarind Hill, Galle and Craigbank, Nuwara Eliya.

The leisure unit which has 269 million rupees in assets had lost 32 million rupees in the year to March, but is expected to stabilize next year, Abeyesinhe said.

Asia Capital had recently invested 2.5 million US dollars to new media company called Asia Digital Entertainment targeting both local and international markets.

"Our media group consists of both local and Indian experts," he said. "Our main objective is to provide quality digital cinema experience to the audience, which is lacking in the local market at present."

Asia Capital group will also invest in a new information technology company.

Asia Asset Finance, a fully owned unit which offers leasing, hire purchase and mortgage loans, plans to raise half a billion rupees through an initial public offering planned for October this year.

In the year to March 2011, the firm made 74 million rupees in profits, Abeyesinhe said. He said a 30 percent stake will be sold in an initial public offering probably at 2.50 rupees.

"By utilizing this IPO funds we are planning to expand our finance business more in to the micro finance sector especially in North and East," he said.

"We are already having discussions with relevant international lending bodies with regard to this micro finance initiative."

Asia Securities, the group's 21 year old stock brokering arm is looking to acquire some 'troubled' brokering firms, Abeyesinhe said.

"The industry needs more consolidation to survive. At the moment we have 11 branches, with some acquisitions we plan to expand our retail client base."

In the year to March the group reported profits of 885 million rupees including 268 million rupees in capital gains.