Resort investors attempt to get income moving
4:00AM Monday Sep 21, 2009
By Anne Gibson [New Zealand Herald's latest Update on Fiji Investors].
Some investors mortgaged their family homes to buy into the villas and were in tears about their plight.Investors who poured $200 million into the Fiji Beach Resort & Spa managed by Hilton are working with a receiver in an attempt to get money flowing again.
Villa Owners' Association members met in Auckland on Thursday and Friday at lawyers Lowndes Jordan to nut out a plan of action.
They are working with Grant Graham of KordaMentha, the Auckland receiver of Fijian companies Denarau Investments and Denarau International.
Those two Nadi companies received money from the hotel business and were expanding the 160-villa property which continues to operate.
But a big cost blowout for Greenlane developer Neville Mahon sparked major issues which came to a head towards the end of last year.
Receivers were appointed this month after Bank of Scotland provided a $45 million loan, and Strategic Finance is owed about $75 million.
The four association members paid $3 million-plus for resort properties but have had no income for months.
They are Rick Campbell, of Melbourne, who owns a villa and studio he bought for $860,00; Trevor Rogan, of Southland and Fiji, who owns a villa he bought for $425,000; Sarah Hunter, of Auckland, who has an $800,000-plus villa; and Graeme Knott, a Melbourne accountant, who owns a $940,000 de luxe two-bedroom villa.
Rogan said some investors had mortgaged family homes to buy into Fiji and were in tears to him about their plight. They were having to sell their family homes, he said.
Knott, of Moonee Ponds chartered accountants Knott and Associates, met Graham on Thursday and proposed an arrangement which has yet to be put to all villa owners. Knott emphasised that he wanted to keep them informed and would not act without their consent. He was reluctant to release precise details until the deal was in place.
But he wants money to go to investors from the hotel business, which he says enjoys high occupancy rates and is operating extremely successfully.
Rogan said investors first learned of problems in January when their $1.1 million payment for the quarter to December was not deposited. "We haven't been paid since then," a disappointed Rogan said, estimating that about $4 million to $5 million was owed.
Mahon invoked a force majeure clause in contracts to deny revenue, naming floods and a fierce cyclone during January, the international recession and Fiji's political situation.
The association says its first task in January was to ascertain the identities of other property owners: 141 investors are New Zealanders, 52 are Australians, 16 live in the United States, 30 in Fiji, one lives in Dubai and one in Canada. People were drawn to the resort for regular income payments and the benefit of a free 10-weeks-a-year stay in their studios or villas. The beachfront resort opened in 2006.
Hunter said the association wanted one organisation and was seeking an accord with another investor association led by Tappenden's Rob Campbell, of the Viaduct Harbour.
Rick Campbell said this had been accomplished and the investors would be "moving together as one group with a common purpose".Grant Watson was appointed chairman of the new combined investors' body on Friday and Rogan said the next step would be to send information to all owners.
As re-blogged by FTCM
As re-blogged by FTCM