Canwill Holdings sale advances as Sri Lanka shortlists five bidders for the unfinished Grand Hyatt-linked Colombo development.
The Canwill Holdings sale has entered a decisive stage after the Sri Lankan Government shortlisted five bidders for the proposed disposal of its entire stake in the State-owned company.
The Finance, Planning and Economic Development Ministry selected five of the eight parties that responded to the Government’s Request for Expression of Interest issued on 24 December 2025.
The shortlisted bidders can now participate in the second-stage Request for Proposals process.
They are India’s Chalet Hotels Ltd. and Juniper Hotels Ltd.; a consortium of Phoenix Ventures Ltd. and Bluestone Capital Ltd.; Ceylon Steel Corporation Ltd.; and a consortium comprising EML Consultants PLC and Italy’s Kimetal S.r.L.
Canwill Holdings Sale Revives Troubled Colombo Project
Canwill Holdings was incorporated in December 2011 as a fully State-owned enterprise focused on tourism and hospitality investments.
Its principal asset is the major Colombo development now associated with the Grand Hyatt brand.
However, the property’s history stretches back much further.
The development originally began under the Ceylinco Group as the Celestial Residences project.
Construction stopped after the collapse of the Ceylinco financial empire and the Golden Key crisis in 2008.
The Government later intervened and took control of the property in 2012.
Under Canwill, the project evolved into a 47-storey hotel and serviced-apartment complex with 458 hotel rooms and 100 serviced apartments.
Although contractors substantially completed the main concrete structure and façade, the development never entered commercial operation.
The project also became increasingly dependent on public-sector funding.
The Employees’ Provident Fund invested Rs. 5 billion, while Sri Lanka Insurance Corporation and Litro Gas also became major investors.
Their combined investment in Canwill reached approximately Rs. 18.5 billion.
Forensic Audit Examined Rising Costs
Canwill later faced serious scrutiny over its financial management.
A forensic audit conducted in 2015 examined alleged irregularities involving procurement, expenditure and corporate decision-making.
One significant finding involved the estimated cost of the Colombo development.
The figure had increased from approximately Rs. 13 billion to more than Rs. 27 billion.
The company also became connected to investigations into the alleged diversion of public funds.
One case involved Rs. 500 million linked to Litro Gas and transactions involving Helanco Hotels and Spa.
Criminal proceedings followed. However, the Permanent High Court-at-Bar ultimately acquitted the accused.
Meanwhile, the unfinished development continued absorbing capital without generating the returns originally expected from the project.
EPF Exits as Government Seeks New Investor
The Employees’ Provident Fund has now exited Canwill.
It recovered its original Rs. 5 billion investment after transferring its stake to the Government as part of the restructuring process.
The Government estimates that completing the Colombo development will require a further US$120 million.
Deloitte Touche Tohmatsu India LLP is serving as financial adviser for the divestiture.
The Canwill Holdings sale therefore represents more than the disposal of another State-owned enterprise.
The eventual investor will acquire a potentially valuable Colombo property, but also inherit an unfinished development shaped by years of financial, legal and administrative complications.
For the Government, the immediate challenge is finding a credible investor with the capacity to complete the project.
The larger challenge is ensuring that the eventual transaction finally resolves Canwill’s long-running legacy rather than simply transferring its unresolved problems to a new owner.
