Top Bermuda resort goes into receivership

By Admin Wednesday September 18 2013 in Caribbean
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HAMILTON: Tucker’s Point, one of recession-hit Bermuda’s top resorts, with a debt of more than US$130 million, has been placed into receivership.

 

Tourism minister, Shawn Crockwell, said government was disappointed by the news.

 

“We had hoped it (receivership) could have been avoided,” he said. “Despite rising occupancy rates, the resort operation has been struggling for years with significant debt challenges. Although we are not aware of all the details, we are encouraged by the fact that Rosewood Hotels & Resorts has agreed to continue operating the luxury property on a business-as-usual basis. It is a sign of confidence by one of the world’s leading hoteliers.”

 

The 88-room hotel employs an estimated 300 people.

 

Roy Bailey and Keiran Hutchison, of Ernst & Young Bermuda, confirmed they have been appointed joint receivers of Bermuda Properties Ltd. and certain subsidiaries, which own the Tucker’s Point resort. They said the resort would continue to operate as normal.

 

Bailey said the loan outstanding to HSBC, Bermuda’s largest bank, is more than US$100 million and the majority of some $50 million is owed to leading insurers, Argus and Bermuda Fire & Marine, a level of debt too high for the resort to support.

 

International group Rosewood Hotels & Resorts will continue to operate Tucker’s Point. Bailey said all bookings would be honoured and staff would continue in their jobs. He said bookings for October were strong with most weekends sold out.

 

Ernst & Young teams have already been to the resort – which opened in 2009 on the site of the former Marriott Hotel – to begin meeting staff.

 

“Staffing levels will continue to be set according to the operational needs of the resort,” said Bailey. “The fact the hotel has gone into receivership does not mean it will immediately result in job losses. The hotel will not be put up for sale any time soon. We have a very open mind on that timeline.”

 

Crockwell said the setback offered an opportunity to restructure the resort’s financial situation.

 

“Rosewood Tucker’s Point is an outstanding property – world-class in its setting and facilities – whose best days are ahead, and government will work with management and staff to support its future success,” he said.

 

Tourism was shaken in 2011 when Newstead Belmont Hills, the first new resort in Bermuda in 35 years which began operations in 2008, was placed into receivership by Butterfield Bank.

 

Pink Beach Club, which closed in 2010, was also put in receivership by Butterfield. This year it was bought by Frank Palmer’s PBC Holdings for $12.5 million.

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