Newstead Belmont owner speaks of receivership shock
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Receivers say they will look to reorganise and restructure the operation at the Newstead Belmont Hotel with a view to selling the assets as a going concern.
Receivers have been called in to the Newstead Belmont Hills Resort and Spa, it was confirmed this afternoon.
An official press release is due to be issued shortly but a spokeswoman for Ernst and Young told The Royal Gazette that receivers and managers have already been appointed.
Newstead developer, Kevin Petty, and general manager, Clarence Hofheins, have not responded to requests for comment.
The hotel was opened in 2008 after extensive redevelopment featuring 45 fractional units varying in size from studios to three-bedroom units. It was the first large luxury property to open in Bermuda in 30 years. The development was financed through Butterfield Bank.
It is not known yet how much of the loan is outstanding. However, in 2009 the credit provisions on two hospitality loans totaled $94.3 million at the bank.
Today Ernst & Young released a statement which said: “Gil Tucker and Rob McMahon of Ernst & Young Ltd., Bermuda have been appointed Receivers and Managers of Newstead Belmont Hills Golf Resort and Spa effective immediately. Specifically, this includes Newstead Belmont Hills Shuttle Ltd., Newstead Belmont Hills Hotel Ltd., Belmont Hills Golf Course Management Limited and Belmont Hills Property Limited.
“Operations will continue to run under the management of the receivers. The receivers do not anticipate any immediate impact on the day-to-day operations of the businesses.
“The receivers will focus on reorganising and restructuring operations to facilitate business continuity with a view to a sale of the assets as a going concern.
“Valued customers will continue to have access to the resort and its amenities. Members in good standing will have access to the golf course. Owners of fractional units will continue to enjoy access to the properties and facilities. Onsite restaurants (Blu and Beau Rivage) are operated by independent owners and are not part of the Receivership. They remain open for business as usual.
This evening, Kevin Petty, the owner/developer of the Newstead Belmont, said: "The telephone call that I received from the Bank of Butterfield shortly after 8am today telling me I was in receivership came as a considerable surprise and an awful shock.
"The last few years have been in tough in terms of operating the resort and keeping it alive, but I didn't think it would come to something like this."
He said he had been working closely with the bank over the last 18 months to restructure Belmont's financing arrangements and as recently as last Tuesday had been hopeful of entering into a restructured financial arrangement.
Mr Petty said he had not expected the bank to make a demand for payment of the debt in full.
"I was not expecting the bank to make a demand for repayment at this time and I was certainly not expecting to come to work today and find that my first appointment was to be with people from Ernst & Young."
He said there would be no immediate impact on staff and that he would continue to try and raise capital to pay the bank's debt.
"This property is my life, I have invested over ten years of my life and countless millions of my own dollars into the project.
"I have sacrificed everything to keep this project alive and I don't intend to simply walk away and lose it all if I can possibly avoid it."
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