Lazard and MTI to advise on Sri Lanka state-owned luxury hotel sales

The Sri Lankan government has finalised its transaction advisory team in preparation for the sale of state-owned Hilton and Hyatt hotel assets in Colombo, with Lazard of Singapore in association with local consultancy MTI beating out a long list of bidders.

Following a Request for Proposals call for advisers from Sri Lanka’s Public Enterprise Development Ministry at the beginning of the year, and a later announced short-list of candidates including KPMG, Hotelivate, JLL Property Consultants (India), and Lazard Asia, the National Policies and Economic Affairs Ministry has now declared Lazard of Singapore and home-grown consultancy MTI Consulting as the successful bidders. 

According to the tender, Lazard and MTI will be tasked with advising the relevant ministry on a strategic course for the divestment of its Hilton and Grand Hyatt assets, while courting and evaluating the suitability of potential international investors. According to reports, the government wishes to offer a strategic controlling stake to a qualified and reputable investor in the two state-owned holding companies which in turn own the Hilton and Hyatt, with the balance of shares to be offered publically by way of an ‘offer for sale’ listing.

The two companies, Hotel Developers, which owns the Hilton, and Canwill Holdings, owned by a trio of state-entities and the owner of the Grand Hyatt construction development in turn, were identified by the government in 2016 as non-strategic enterprises subject to a strategy of divestment – with the five-star Grand Hyatt development, built for the most part on government-lease land, expected for completion later this year. With this latest step in the process of offloading its shares, the Economic Affairs Ministry said on its website: “We are pleased to inform you that the Cabinet Appointed Consultant Procurement Committee has recommended Lazard Asia Ltd. of Singapore in association with MTI Consulting to be awarded the contract. They will act as an international transaction advisor for the sale of Government ownership in Hilton and Grand Hyatt Hotels.”

While Lazard is an international behemoth founded in 1848 (with its Singapore branch opening in 1995), the home-grown MTI Consulting celebrated just its 20th birthday last year, but has in that time spread its services to projects in more than 40 countries – and can now boast of its own association deep into the century before last, having recently teamed up with the 1841-founded local law firm F. J. & G. de Saram to establish Legal Source, a joint legal services venture.

Together, the awarded firms have beaten out a lengthy list of high-profile contract contenders, with, according to public ministry documents, PwC (Singapore), Colliers International (Singapore), Savills (Singapore), Deloitte Touche Tohmatsu (India) and the short-listed KPMG (Colombo) among them. Meanwhile, according to Crowe HTL, the hotel, tourism & leisure arm of the global accounting and professional services network, Colombo is the third fastest growing visitor destination in the booming Asia Pacific tourism and hospitality market