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Sri Lanka hotel in talks with Hilton to reduce management fee

Oct 27, 2011 (LBO) - Sri Lanka's Hotel Developers, is negotiating with Hilton International USA which runs the property to reduce management fees, a stock exchange filing said.
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The management is also in talks on with the government to restructure the firm and "overcome the debt burden and interest commitment," it said.
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It said the management of Hotel Developers has called for an extraordinary general meeting on November 21, 2011 over the serious loss of capital situation in the firm which is saddled with heavy losses and debt.

The firm has incurred a loss of 10.

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3 billion rupees as at March 31, 2010 with net assets being a negative 4,773 million rupees.
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"The company has been negotiating with Hilton Worldwide to reduce the management fees and other group charges with a view to increasing the company's profitability," the statement said.

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The hotel's profitability had improved after the minimum room rate was raised in accordance with a government directive to the hotel trade last year, it said.

Occupancy levels have improved with the increase in tourist arrivals after the end of the island's 30-year ethnic war in 2009.

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