Debt collectors Jamaica Redevelopment Foundation has put its own man on the job to secure buyers for Enchanted Gardens, the tax-burdened and debt-ridden resort property owned by former Prime Minister Edward Seaga's Premium Group.
The American company holds more than a third of the 129 apartments on the complex, sources tell the Financial Gleaner.
JRF has hired Ken Tomlinson of Business Recovery Services Limited as receiver/manager under mortgage to sell the St. Ann property, plus several other pieces of real estate the company acquired as part of a bad debt portfolio it bought from Finsac, Jamaica's financial sector bail out company, five to six years ago for US$23 million plus 25 per cent of debts recovered.
Douglas Chambers remains as liquidator.
"Myself and Mr. Tomlinson are working very closely together on the matter, and we share information," said Chambers, a forensic auditor and principal in Chambers Henry and Partners.
The latest figures on Finsac, filed in Parliament Tuesday but dated to March 2005, suggest that JRF still had properties valued at US$25 million to dispose of up to that period.
Two bids
Separate sources say that Tomlinson, who began advertising several properties in mid-August, has had bids for Enchanted Gardens from two buyers, one of which is a foreign real estate investment and project management firm based in Barbados, another from the United States; while a third local company is making enquiries.
The bid prices are subject to due diligence being done by the companies, one source said.
The 20.59-acre property in Ocho Rios is described as a resort complex of 129 apartments spread across eight 4-storey blocks, plus other buildings, spread across a gross floor area of 152,405 square feet.
The complex features rare birds and plants, plus 14 waterfalls.
Sources in the know also say Enchanted Gardens has been loosely valued at US$8 million to US$12 million, inclusive of the grounds, common areas, and apartments, blocks of which are owned by different interests.
"Premium owned the land," the source said.
Three years ago, the resort complex's value was US$16 million on the freehold property, according to documents acquired by the Financial Gleaner, but the targeted sale price was in the region of US$12.8 million.
At those estimates, the resort property would represent a fair chunk of the value of the remaining JRF portfolio, which Finsac's audited 2004/05 financial statements suggest has an estimated value of US$21 million to US$25 million.
Asset sale deals
JRF, now run by Janet Farrow following the departure of Denis Joslin, up to last year had secured deals on asset sales that have 'netted' US$16.75 million, and paid over US$3.8 million to government, or 22.7 per cent of collections, which is more than two per cent short the agreement.
Enchanted Gardens - more precisely, the companies that owned and managed it, Premium Investments Limited and Town and Country Resorts Limited - was put into voluntary liquidation by Seaga in August 2003, who said then that the attraction was $200 million in debt, but had sufficient assets to cover the liabilities.
Four months later, the tax liabilities were reassessed at $243 million, including $155 million for GCT, and other income and statutory taxes. Staff costs and professional fees bumped the figure owed to 'preferential creditors' to more than $263 million, plus another $100 million owed to unsecured creditors.
JRF owns about 38-40 per cent of the 129 apartments on the property, which it wants sold. Tomlinson, sources say, cannot finalise any sale without a nod from Chambers, the liquidator Seaga had appointed, and who now has charge of the property.
Tomlinson is negotiating deals for "everything but the apartments," said Financial Gleaner sources, who confirmed that he and Chambers are collaborating to secure deals for the complex.
"Tomlinson has charge of the common areas," another source said.
JRF along with Bank of Nova Scotia are said to be the two largest block owners of apartments on the Enchanted Gardens complex.
- lavern.clarke@gleanerjm.com
