A meeting scheduled for Monday, May 21 to approve the controversial sale of the Hilton Barbados Resort has been abruptly called off, effectively leaving the future of the Needham’s Point property in the hands of the new administration to be elected next week.
Dr Justin Robinson, chairman of the National Insurance Board (NIB) – a minority shareholder in the property- told Barbados TODAY this afternoon the NIB had been informed that Monday’s meeting had been cancelled.
This means the proposed sale cannot proceed in the absence of a resolution by the shareholders, he said.
“A sale would require a shareholders’ resolution to sell the property . . . so a sale could not take place in lieu of that shareholders’ resolution. So until such a time there is a shareholders’ meeting that passes a resolution for the sale of the property, then there can be no sale of the property,” Robinson explained, adding that a new date had not been communicated to the NIB.
“The Company’s Act requires a 21-day notice period for any such meeting,” he said.
Robinson said the NIB had not taken an official position on the sale, adding that the board was expected to meet tomorrow to decide its position.
It was not immediately clear what led to the cancellation of the meeting, but one media report yesterday that plans were under way by the NIB to stop the shareholders’ meeting in order to avoid a showdown between the insurance scheme and Needham’s Point Holdings Ltd (NPHL), the hotel’s owners.
The cancellation is also a victory for the Barbados Labour Party (BLP), whose leader, Mia Mottley, flashed documents at a party meeting in Oistins, Christ Church on Sunday night to support her claims that the Freundel Stuart administration intended to sell the hotel and its surrounding properties to London and Regional Properties, a private real estate and leisure investment firm based in London, United Kingdom, for $160 million, after Minister of Finance Chris Sinckler had said in his 2017 Budget presentation that the property was valued at $200 million and “Government is expecting to receive no less than Bds$100 million as the net proceeds from the sale, taking into account the liquidation of existing debt liabilities attached to the property”.
Mottley also presented documents that showed that the hotel was valued at $252,824,956 two years earlier, before major renovations of over $11 million, and argued that should the sale proceed there would have been a loss of nearly $93 million.
It was for this reason that she told supporters the sale had to be stopped “at all cost”, as she called on them to turn out in their thousands at Needham’s Point on Monday, if needed, to ensure that the meeting did not take place.
The BLP leader also questioned the rush to sell the property, stating that such an important transaction ought not take place mere days before a general election.
The BLP first pointed to the disparity between the value of the property and the proposed sale price when it posted on its website last December that Government would actually only earn about $33 million from the sale.
Mottley elaborated on Sunday night with the support of the documents, which showed that from the $160 million, outstanding long-term loans of $115 million and short-term loans of about $12 million had to be paid, leaving a net total of $32,981,528.
The NIB was also said to have been unhappy with the proposed deal, with Mottley presenting a document which she said was a board paper from last November declaring that to sell the resort at a “fire sale” price was wrong as it was a performing asset.
She also indicated that the NIB was worried that if the hotel were sold at this price it could result in the NIB not being paid its equity investment.
The Caribbean Development Bank is the second minority shareholder in NPHL, while Government holds 90 per cent of the shares.
It was the same document the BLP appeared to have been quoting from last December, when it posted that “the details of the sale that have been shrouded in secret were revealed over the weekend [Monday, December 4, 2017] through a National Insurance Board paper which was penned out of concern that the scheme stands to lose the $10 million of hardworking Barbadians’ money it invested in the Needham’s Point, St Michael hotel project.
“That paper noted that though a minority shareholder with equity investment of $10 million, their rights were not acknowledged and ‘like everyone else heard of the pending sale via the [May 30] Budget speech and the media. There was no official correspondence or discussion with the minority shareholders of the sale,’” the BLP stated at the time.
Quoting from the NIB paper, the BLP said the document asserted that apart from this $10 million in common equity shares, the board was also a bondholder, having purchased a $17.3 million “bullet bond” which was arranged by Royal Fidelity.
“Here again, no correspondence was received on the repayment of these bonds. The sale of the Hilton Hotel, the main asset of Needham’s Point Holdings Ltd of which the NIB is a shareholder and has a total investment of $29 million for $160 million will put the NIB’s investment at significant risk of loss,” the paper, dated November 28, stated.