Monday, April 29, 2013
Monday, April 29, 2013
SuperClubs has disposed of stakes in four properties since 2012, but retains minority holdings in at least one of them. It has also retreated from management contracts over the past four years for properties operated under lease.
The resort group is currently focusing efforts on property upgrades in The Bahamas, but it is also on the hunt for other investments.
“We are also currently in negotiation for four properties with over 2,000 rooms in the Caribbean,” Issa said Thursday, but offered no details.
Citing competitive reasons, he also declined to disclose whether he was purchasing or leasing the properties.
The most recent sale was Breezes Grand Negril Resort & Spa – also referred to as Bloody Bay hotel – “and some brands” to the Blue Diamond Group of Canada on April 17. Issa said the property will be rebranded Grand Lido.
SuperClubs controlled the asset since 2000 when Issa used Village Resorts to partner with the UDC to buy the property from a Finsac-controlled company called International Hotels.
Each paid half of the US$9 million for the stake in the property, beating out a similarly priced offer from Guardian Life, according to Finsac disclosures at the time.
The current sale price to Blue Diamond Group has not been disclosed by SuperClubs. Issa confirmed Thursday that SuperClubs had bought out UDC’s interest prior to the sale.
With that sale, the group, which was once one of the largest chains locally, is now down to two relatively small properties in Jamaica – Rooms on the Beach Ocho Rios and Rooms on the Beach Negril.
The reduction of its footprint in Jamaica dates back to at least 2009 when SuperClubs gave up the operating contract for Breezes Montego Bay – a property owned by pension funds, National Insurance Fund and NCB Staff Pension Fund. It also exited operating agreements for SuperFun Runaway Bay – previously known as Hedonism III – and the former Grand Lido Braco.
However, the disposal of its own properties was concentrated in 2012-2013.
In February, the former Hedonism III in which SuperClubs held minority stake of 15.22 per cent was sold to Sagicor Life Jamaica by lienholder Development Bank of Jamaica. Sagicor now owns 100 per cent of the property.
SuperClubs has also sold properties in Trelawny, St Ann and Negril either outright or in deals under which the resort group retains minority interest.
“I continue to be a shareholder and director of Hedonism II,” Issa told the Financial Gleaner.
“I still have a lot of interest in the tourism industry and am planning aggressive expansion in the Caribbean. As good opportunities arise, I will take advantage of them,” he said.
SuperClubs is currently wrapping up a project on the Baha Mar property in The Bahamas, according to Issa, and plans to expand the adjoining Breezes Bahamas hotel once the current project is finalised, Issa said.
In early 2012, SuperClubs had 10 properties in its portfolio in Jamaica and overseas. It now owns six: the Rooms resorts in Ocho Rios and Negril; Breezes Bahamas in Nassau; and Breezes Varadero, Breezes Bella Costa and Breezes Jibacoa in Cuba, according to SuperClubs’ head of marketing, Zein Issa-Nakash.
Chairman Issa said the disposals were opportunistic.
“The restructuring took place quite by accident, in that there were rumours that SuperClubs resorts were for sale long before they actually were. Because the rumours were so prevalent, and even though we kept denying them, it piqued the interest of many in the industry. I received calls from persons who asked if I could, in fact, sell to them. We started discussions and ended up with win-win situations,” he said.
One such was concluded in February 2013 with the sale of the Hedonism II property to international investor group Marshmallow Limited.
Marshmallow, a company formed to own and operate the hotel, is headed by majority stockholder Harry Lange, with partners Jon Gross of UnWind Travel, the Issa family, and Kevin Levee, the hotel’s current general manager.
“As a good businessman, when I see an opportunity, I take advantage of it,” Issa said.
Still, the disposal further reduced SuperClubs’ footprint in its home market to just two small properties owned by the group. In 2012, the hotel company also sold Breezes Trelawny Resort & Spa to Blue Diamond. The property was re-branded as Memories White Sands Beach Resort & Spa.
SuperClubs also sold its golf resort, Breezes Runaway Bay, to Sagicor Life Jamaica last year. Sagicor took possession of the property last June and has since rebranded it Jewels Runaway Bay Beach and Golf Resort.
Issa said he is not losing interest in Jamaica as an investment destination, notwithstanding his current focus offshore.
“Every country has its challenges and opportunities. I am able to function in most places because before I invest in any country, I try to get an understanding of how the system works. I then take that into account when operating my business,” said the SuperClubs chairman.
Issa declined to name other properties in which he retains minority interest.
Source: Jamaica Gleaner.