Bank of Maldives Re-lists Kalhudhiyafushi Resort Island for USD 34.26 Million

Bank of Maldives (BML) has announced the sale of Kalhudhiyafushi, a Thaa Atoll island under development as a tourist resort, for the third time. This comes after the borrower failed to repay a loan, prompting the bank to foreclose on the property.
Interested buyers must submit their bids by 12 pm on June 30th. The starting bid for the island is USD 34,258,000, and successful bidders will need to make a deposit payment of USD 100,000. This price represents an increase from previous attempts to sell the island. In September 2021, the island was priced at USD 30 million, and the initial sale price in September 2019 was USD 29.5 million.
BML's sale note explains that banking facilities were granted to Huravee International Pvt. Ltd., a company largely owned by former MP of Thaa Guraidhoo constituency, Hussain Manik Dhonmanik, through a facility agreement in 2016. However, due to the borrower defaulting, BML sought legal relief, and in February 2019, the Civil Court granted the bank the right to sell the mortgaged assets to recover the dues.
Kalhudhiyafushi was initially leased via the Maldives Marketing and Public Relations Corporation (MMPRC) for development as a resort. The island's development was part of a larger investigation by the Anti Corruption Commission (ACC) into the MMPRC embezzlement case. The agreement to develop Kalhudhiyafushi into a tourist resort was signed on August 24, 2015, between the Tourism Ministry and Huravee International, with former Tourism Minister Ahmed Adeeb signing on behalf of the ministry.
The resort, located near Gaadhiffushi island of Thaa Atoll, was originally scheduled to open in 2017. Plans included 97 private villas, 100 rooms, and three restaurants, in collaboration with international hotel chain Meliá Hotels International. However, the project remains incomplete, with only about 80 percent of the resort's construction finished.
This latest sale attempt underscores the challenges faced in the development and financing of tourism projects in the Maldives. The ongoing efforts to sell Kalhudhiyafushi reflect both the high stakes involved in such large-scale investments and the potential rewards for successful buyers willing to complete the project.
The increase in the starting bid price indicates the bank's confidence in the island's value and potential as a prime tourist destination. Despite the setbacks, the nearly completed resort offers a significant opportunity for investors looking to enter or expand their presence in the lucrative Maldivian tourism market.
As the June 30th deadline approaches, it remains to be seen whether BML will find a buyer willing to meet the asking price and take on the task of completing the resort's development. For potential investors, Kalhudhiyafushi represents not just a financial investment but a chance to contribute to the Maldives' renowned hospitality industry and capitalize on the nation's thriving tourism sector.
In summary, the sale of Kalhudhiyafushi by the Bank of Maldives highlights the complexities and opportunities in developing resort islands in the Maldives. With a starting bid of USD 34.26 million, the island offers a promising yet challenging venture for investors willing to finish its development and bring the resort to its full potential.