State Trading Organization (STO) has officially announced a major breakthrough in one of its most contested legacy issues, finalizing an agreement with Housing Development Corporation (HDC) to exchange the structure of its stalled hotel project in Hulhumalé for a new land plot in Hulhumalé Phase 2, following a formal valuation of USD 20 million.
The agreement was signed on August 31, 2025, and marks a strategic shift in STO’s real estate portfolio—effectively resolving a concern that has consistently dominated shareholder discussions during past Annual General Meetings (AGMs). For years, shareholders have raised questions over the status, viability, and financial implications of the incomplete hotel structure, with repeated calls for clarity and action.
According to STO, the structure—originally under HDC ownership but earmarked for the company’s development—was valued at USD 20 million. In exchange, HDC has granted STO a land plot of equivalent value in Hulhumalé Phase 2, an area currently undergoing rapid transformation with major urban and tourism infrastructure investments.
The move provides STO with a clean slate to reimagine its investment in a more strategic location, aligning with both shareholder expectations and broader market trends. It also eliminates the financial drag and reputational uncertainty tied to the long-stalled project, which had remained unresolved for years.
In line with regulatory compliance, STO has confirmed that the accounting treatment related to the exchange will be reflected in its 2025 annual financial statements, and the disclosure has been made under the Continuing Disclosure Obligations of Issuers (CDOI) regulation issued by the Capital Market Development Authority (CMDA).
STO reiterated that the transaction followed a transparent valuation process and was carried out in full alignment with its strategic commitment to protecting shareholder value, optimizing capital assets, and contributing to national development objectives.
Further announcements are expected regarding the company’s development plans for the newly acquired land in Phase 2.
