Maldives government seeks to divest stake in resort joint ventures

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The Maldives government is in the process of divesting its stake in joint venture companies formed to develop resorts, Tourism Minister Dr Abdulla Mausoom told state media last Thursday (20 April).

Earlier this month, the finance ministry sought parties to conduct share valuations for Bodu Mohora InvestmentHurasfaru Holdings and Naainfaru Holdings. Based on an assessment of their business plans and an industry analysis, the chosen independent party would be required to to submit a draft valuation report of the fair market value of the joint ventures along with the value of shares held by the government.

The cabinet’s economic council decided last year to sell the government’s stake in all such joint venture companies, Dr Mausoom explained, after which the tourism law was amended to allow the private partner to buy the government’s shares. The decision was made because the companies were unprofitable and to facilitate private sector operations, he said.

The government holds between 10% to 15% of shares in resort joint venture companies. The tourism law allowed uninhabited islands to be leased to government joint ventures without a competitive bidding process.

In February last year, Dr Mausoom told parliament that the government was also hoping to sell its 32% stake in the Villingili Resort & Spa in Addu Atoll, which operated under the Shangri-La brand before it was shut down due to the pandemic in April 2020.

The resort was made available for acquisition in June last year with American agent CBRE enlisted to oversee the sale.