The 738 shareholders in the Almond Beach Village
Resort could be receiving a mere eight cents on every
dollar invested when the dust finally settles.
A source told Barbados TODAY that five major
investors in the hotel were currently holding 80 per cent
of the shares, while the minor shareholders, who included
workers at the St Peter establishment, were holding
20 per cent.
The major shareholders who would have bought shares
initially at the going price of $2 per share are Barbados
Shipping & Trading –– 20.5 million shares, which represent
36 per cent; Roberts Manufacturing Co., Ltd –– 11.3 million
shares, which represent 20 per cent; Sagicor Equity Fund
–– 8.2 million shares, which represent 14 per cent; Neal &
Massey Ltd –– 3.2 million shares, which represent six per
cent; and the National Insurance Scheme –– 2.4 million
shares, which represent four per cent. Giving more details
of the transaction which would see Barbados Tourism
Investment Inc., which is an arm of the Government,
recording a loss of US$20 million before the property is
handed over to Sandals of Jamaica to run, the source said:
“We have a property which is about 30.725 acres and
additional land of 10,360 square feet, with an improved
value of BDS$140 million being sold to BTII for
“The first concern is, this property is being sold at a
value way below its land tax value. Another issue is the
valuation of the Almond brand which is US$3 million. With
brands and property one would expect an independent
professional valuation. You should have an independent
professional valuer determine if the US$3 million for the
brand is a fair price.”
The source continued: “Almond had a special meeting
of the shareholders to agree to sell the property to BTII.
Now here are the terms: the terms were a deposit of US$25
million. Now you would want to know if BTII has paid the
deposit. One would expect by now that US$25 million would
have been paid in. When we look at the terms, the other
US$28 million was given as a loan to BTII under the following
terms. The agreement was over a three year period at five
per cent interest. The government has acted as guarantor for
only US$5 million. Government has not acted as guarantor
for the full sum.
“The question has to be asked if due diligence was carried
out on BTII. It has to be remembered that Government’s
sovereign currency has been reduced to junk bond status;
therefore one would have expected a higher rate of interest
for a Government entity, probably in the region of ten per
cent plus,” the source added.
The source pointed out that US$20 million of the US$25
million will be used to pay off the Bank of Nova Scotia, while
US$5 million is being used as closing cost of the transaction
related to the sale of the property.
He further pointed out that the other US$28 million
will be used to pay back loans from BS&T, the property
transfer tax, monies owed to the NIS, the Value Added Tax
Department, suppliers and Inland Revenue.
“It is only at that stage that after all of these debts
have been paid off that you get to the shareholders. They
are anticipating, based on what was said at the special
meeting, you would have just enough money to pay each
shareholder about 7.8 cents in the dollar. These shares are
currently traded on the local Stock Exchange at 32 cents.
They anticipate that when this transaction is all finished,
shareholders would only get back 7.8 cents in the dollar.
They will be losing 98.2 cents in the dollar,” the source said.