A settlement agreement has been signed with Urbanco after negotiations over the State Trading Organization's (STO) unfinished hotel in Hulhumale', STO managing director Abdulla Saeed revealed on Wednesday.
Urbanco agreed to take over the hotel and award two plots of land to STO.
The construction of the hotel started more than 10 years ago after STO signed an agreement with America's Carlson Hotel Group. But work stalled and announcements were made on various occasions to seek a party interested in managing or buying the property. But the efforts were unsuccessful.
Responding to a question from a shareholder at STO's annual general meeting, which took place at the Central Park in Hulhumale', Saeed said STO would be compensated for its investment as part of the settlement agreement.
"Urbanco proposed land in exchange for our investment," Saeed said.
Urbanco offered two plots instead of monetary compensation and documentation efforts are underway to hand over the land to STO, he said.
"We've learned that Urbanco has decided to lease this hotel to a foreign party and has even signed an agreement with them," Saeed said.
Stalled STO hotel in Hulhumale' - Photo: Abdulla Iyan/Adhadhu
The hotel, which was due to be completed by 2013, was previously to be managed by the Hilton hotel brand Radisson Blu. But work stalled due to various problems and the project was buried.
A decision was made during former president Abdulla Yameen's administration to sell the hotel. But no buyer could be found.
Shareholders also complained during previous annual general meetings about the project remaining stalled for years after STO spent MVR 115 million to build the hotel. But the former STO managament was unable to find a solution.
In the 20th annual general meeting since the sale of shares to the public, several important decisions were made for the coming year. Directors were appointed to the company's board and PWC was retained as STO's auditor for the fourth consecutive year.
Shareholders approved a dividend of MVR77 per share as proposed by the board last year.
