John Keells Hotels PLC has entered into an agreement to divest its controlling stake in the company that owns the well-known Cinnamon Citadel in Kandy.

In a disclosure to the Colombo Stock Exchange, John Keells Hotels PLC said it has signed a binding agreement with Lavendish Leisure, the hospitality arm of the Dedigama Group, to divest its entire shareholding in Kandy Walk Inn Limited (KWIL).

The transaction involves the sale of 98.39% of KWIL’s issued share capital for a total consideration of Rs. 2.777 billion. KWIL is the owning company of the Cinnamon Citadel hotel located in Kandy.

Despite the change in ownership, the hotel will continue to be managed under the Cinnamon Hotels and Resorts brand for a minimum period of 12 months, subject to review thereafter, according to the announcement.

The divestment forms part of the group’s asset-light strategy in its hotels segment and comes alongside the commencement of operations of Kandy Myst by Cinnamon, the operating entity of which is 40% owned by the company.

John Keells Hotels said the proceeds from the transaction will support the optimal allocation of capital to upgrade its hotel portfolio, in line with the positioning and future outlook of its properties.

The transaction is expected to be completed by 31 March 2026, with a further announcement to be made upon completion.