Sri Lanka hotel group exits loss-making Maldives resort

Aug 27, 2010 (LBO) - Sri Lanka's John Keells Holdings (JKH) group said it had exited from an island further away from the capital of the Indian Ocean archipelago of Maldives, and extended its lease at a more profitable resort.

But the Alidhoo island was making losses, and Dhonveli was more profitable the firm said.

The Maldives government leases uninhabited islands to resort operators. Lease rentals are a key source of revenue for the state.

JKH said it had sold the 'head lease' of Alidoo Island, which was located in the northern most atoll in the archipelago and in return received a 18 year head lease for Dhonveli resort which was 15 minutes by speedboat from the capital, Male.

The group had previously had a 'sub lease' for Dhonveli until 2021, JKH said in a statement.

The switch did not involve capital gains to the group.