The plan to dispose of the Neal and Massy Holdings-owned, Barbados-based, debt-ridden Almond hotels was in the cards since 2011. Last week, Ralph Taylor, chief executive officer of Almond Resorts, said Almond Beach Village will close April 30 amidst "the deteriorating quality of the product." Neal and Massy chairman Arthur Lok Jack indicated this in the T&T-based conglomerate's 2011 annual report. "Given the uncertainty of the world economic environment and the significant investments necessary to upgrade the hotels in Barbados and St Lucia, the Group took the decision to substantially dispose of its investments in Almond Resorts Incorporated and its associated hotels. "The relevant impairment charges, which arose from this decision together with the losses for the year from the Almond companies have been taken through the discontinued operations line in the Group's consolidated income statement.
"The divestment transactions are expected to be completed in the 2012 financial year and would likely result in the Group remaining with an available for sale investment in Almond Resorts Inc, and with a secured loan to that entity," read the chairman's official statement. Gervase Warner, president and Group chief executive officer, told the regional media that Almond was buckling under more than US$51 million in accumulated debt with US$40.7$80 million in bad debt and US$12.7 million in related party debt.
Almond Resorts in Barbados comprise:
• Almond Beach Village Hotel, St Peter, was ranked by prestigious Child Magazine as a Top Ten Caribbean Resort for families
• Almond Casuarina Beach set on ten acres that border the white sand Dover Beach, close to St Lawrence Gap
• Almond Beach Club and Spa, St James, is an adults only all-inclusive retreat
Interested buyer: Gordon 'Butch' Stewart
The Barbados Nation reported on April 3 that Caribbean hotel magnate Gordon "Butch" Stewart is in discussions with Neal and Massy to buy the Almond Beach Village Hotel. A team from Sandals, including engineers and architects, was due in Barbados over last weekend to carry out an evaluation of the debt-burdened property in Heywoods. Warner told the Barbados media that the Almond hotel brand was "a drag"on the Group's profits. Neal and Massy gained 51 per cent ownership of Almond after its takeover of Barbados Shipping and Trading (BS&T), in 2008. Warner said Almond Resorts expanded from two to five hotels under management, adding: "That was a big stretch for the management team and...those hotels opened into the worst tourist season Barbados has seen "even worse than after 9/11." Warner stated in the 2011 annual report of the Group's decision to sell its interests in Almond Resorts.
"Since we took the decision to sell-down our interests in the Almond hotels in 2011, all of our Almond investments are being treated as 'Held for Sale' (in discontinued operations). "Booking the loss on the recoverable value of these assets, the Group made a $270 million provision against its carrying values for the Almond investments," Warner stated. He added: "At the time of writing this report, our investment disposal and restructuring initiatives for the Almond hotels are well underway and will be completed in our 2012 financial year. Given the transactions being contemplated at this time, the Group will likely remain with some available for sale investment in Almond Resorts Inc and with a secured loan to that entity. "The provisions for losses on the carrying values of the Almond properties are notably not cash losses. In fact, the Neal and Massy Holdings balance sheet is strengthened by eliminating US$75 million of debt," Warner stated.
2010 upgrade plans went awry
The plan for Almond Resorts in 2010 was much different. Almond Resorts CEO Ralph Taylor stated in the Neal and Massy Holdings 2010 annual report: "Refurbishment plans for the Almond Beach Village property have been completed and funding has been secured. These improvements will be implemented throughout the year, taking hotel operations into consideration. In 2011, major initiatives will also be undertaken to improve revenue production and operations performance at the hotels. Together with the government's support for tourism and market diversification, we expect a slow but improved turnaround of the Almond performance, the benefits of which will take some months to materialise, but should be fully reflected in 2012 results."