Finance ministry sources say several international entities have shown an interest to buy the hotel following advertisements were published locally and internationally.
In a statement, it pledges to have a transparent process to attract investors.
Therefore, the government has decided to appoint an independent financial adviser with offices globally who has experience in divesting hotel assets.
Via a Cabinet appointed consultancy procurement committee, after issuing a RFP, Lazard Asia of Singapore and MTI Consulting of Sri Lanka were selected as financial advisers with the approval of the Cabinet.
They were selected out of 16 international local and foreign financial advisory firms who responded.
Then a Cabinet Appointed Negotiating Committee will be appointed to overlook the divestiture process with the assistance of the Financial Advisers and National Agency for Public-Private Partnership.
Step by step
The first step in the process is to call for expressions of interest.
This is only for the purpose of identifying who the bidding party is.
Via the EOI advertisement placed, interested parties have to indicate their business, financial strength and which hotel asset they have an interest in purchasing.
When they contact the financial advisers, the investors will be sent a simple one page format to fill out basic information about themselves and information on the hotels that is non-confidential will be given to them.
If investors need more time to respond to the one page format, they can request for this.
Therefore, the expression of interest does not require a priced bid.
Why this is being done this way
Meanwhile, Lazard and MTI through their global offices have already begun to reach out to international real estate investors covering many
Why this is being done this way is that both hotels are governed by management agreements with Hilton and Hyatt International hotel management companies and these agreements have confidentiality clauses, which restrict the hotel owning companies from releasing sensitive commercial information.
It is for this reason that parties who express interest will be first shortlisted and then bound to sign a Non-Disclosure and Confidentiality Agreement.
Only after this is signed will the interested investors (not brokers) be given more than 100 pages of detailed financial and other information and given access to a security-controlled data room.
It is after this that the transparent bidding process will start under supervision of the relevant Cabinet appointed committee, where prospective investors will have ample time over several months to prepare financial bids and bid conditions.