STO in u-turn on hotel sale, to continue development via joint venture
State Trading Organisation (STO) has backtracked on selling its luxury hotel in the satellite town of Hulhumale, announcing plans to run the hotel through a joint venture.
Construction of the 250-bed property came to a halt in 2014 due to unknown reasons, with US-based Radisson Hotels later pulling out of a management contract with STO to run the hotel under the brand name, Radisson Blu Maldives.
The public limited company announced plans to sell the property last year. Several international hotel operators expressed interest in buying the hotel as well.
However, STO Managing Director Ahmed Shaheer told shareholders attending the company’s Annual General Meeting (AGM) on Tuesday that the plan to sell the hotel had been scrapped after negotiations with the tourism ministry and other relevant authorities. The directors’ board has decided to go ahead with the development of the property, he added.
“The hotel will open in the next 12 months,” Shaheer said, during the AGM held at the main convention centre of Dharubaaruge in capital Male.
Construction of the property began in October 2011 and major construction works were to be completed by February 2013 with the hotel set to open in November 2013.
STO had in 2012 secured a USD 32 million syndicated loan from Export-Import Bank of Thailand (EXIM Thailand) to develop the property. Under the agreement signed in October 2012, EXIM Thailand and Bank of Maldives (BML) will jointly finance the development.
When construction came to a halt in 2014, about 60 percent of the works had been completed.
According to plans previously made public, the hotel will feature 250 rooms, an ocean-view restaurant and a health club that includes a gym and spa. The property will also offer extensive ballroom and banqueting facilities, with specially designed conference services.