THE NATIONAL Insurance Fund (NIF), has acquired the Grand Lido Braco hotel in Trelawny for the sum of US$23 million, after it racked up almost US$40 million in debt.
The deal includes both the resort hotel and 48 acres of adjoining real estate. The hotel which fell into financial difficulties under its previous owners, Braco Resorts Limited will continue to be managed by the Superclubs management team under the stewardship of local hotel magnate John Issa, under the terms of an operating lease.
Braco Resorts was established to develop 85 acres of real estate property in Trelawny. In 1994, together with CENM Investors it was decided that a hotel would be built on 37 of those acres. FDR Pebbles was built on 12 acres, with the remaining acres divided into available lots.
This latest announcement now means that both Braco Resorts Limited and CEMN Investors Limited, the developers of the hotel are now in a position to honour outstanding obligations to its creditors. Braco Resorts racked up US$39.4 million worth of total indebtedness with accrued interest to all creditors including unsecured ones.
Earlier this year, the managing director of CFC Construction, Delroy Christie told The Gleaner that his company was in no position to pay its workers their end of project bonus at the end of 1997 largely because sums due to the company from Braco Resorts were unable to be made as a result of Braco running into substantial financial difficulties.
Sources
Industry sources said that Braco's debt came to a total of approximately US$40 million and negotiations were protracted and convoluted due to the number of creditors to be dealt with, the mixture of US and Jamaican currency debt and the nature of the debt/equity mix.
The Minister of Finance and Planning, Omar Davies has now made it clear that all the workers who built the hotel will be receiving in full their final payments in relation to the building of the hotel. These workers will be paid by cheque by CFC Construction (Engineers) Limited at the St. Ann's Bay branch of NCB tomorrow, December 14, 2000 between the hours of 2.30 p.m. and 4.30 p.m. Workers collecting their cheques after December 14 should go to the St. Ann's Bay offices of CFC Construction (Engineers) Limited.
NIF's investment manager Fred Cuthbert speaking to Wednesday Business said: "This was by no means a glamorous deal. We are simply taking over a very good property that was encumbered by debt. The patience of the existing creditors must be commended. The hotel will enhance the investment portfolio of the NIS. Looking long term this deal augurs well for the Fund.
"Perhaps down the road we will be looking to expand the hotel. We are fully aware that the hotel sector is a earner of hard foreign currency and employs both skilled and unskilled Jamaican workers. You must bear in mind that the hotel sector is the highest earner of foreign exchange in Jamaica outstripping agriculture and the bauxite industry."
The NIF already has a 10 per cent stake in Beaches, a 49 per cent share in Breezes Montego Bay and is already one of the larger shareholders in the Grand Lido Braco Hotel. It also has holdings in a residential hotel called El Greco in Montego Bay. This is the first time the NIF has attained 100 per cent interest in a hotel.
