Tag Archives: Hotels and Resorts Limited

Barbados Hotels and Resorts debacle continues with another government loan guarantee. Where did all the public money go?

barbados-gems-hotel-scandal.jpgGEMS scandal keeps going and going and going…

Say ‘goodbye’ to your tax dollars as government guarantees a loan with zero hope of repayment.

Adrian Loveridge, small hotel owner.

Adrian Loveridge, small hotel owner.

Whatever was behind any honest intentions of the Hotels and Resorts Limited (HRL) or the “GEMS” debacle, it is difficult to imagine a worse outcome so far.

Government’s decision to guarantee yet another loan to this failed entity, despite the current austerity situation, frankly defies belief and clearly will not have a happy ending.

This latest loan is for BDS$5.55 million at an interest rate of 7.75 per cent, arrangement fee of $350,000 and monthly repayments of $55,000.

Included is a $300,000 overdraft facility which attracts an administration charge of $5,000 each month.

HRL now operate a single hotel – Blue Horizon with just 67 rooms. Another 50 additional rooms acquired at the time of purchase (1997) remain derelict all these years later. Savannah and Time Out at the Gap are leased and operated by private sector interests.

Where did the money go?

Three other properties originally in the GEMS portfolio were sold and it still remains unclear what price they realised and exactly where those funds went. Continue reading

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Filed under Barbados, Barbados Tourism, Economy, Freedom Of Information

GEMS cover-up continues under DLP: Hundreds of millions of Barbados tax dollars vanish with zero public accountability

What are the functions and objectives of an independent Senator?

During the time the late Sir John Stanley Goddard sat in the Senate he repeatedly called for up-to-date financial statements for Hotels and Resorts Limited to be made available.

After all, it’s a majority Government owned company funded by the taxpayer and surely we have a right to know their current fiscal position?

I understand that HRL’s accounts have now been laid in Parliament
for the subsequent years since 2001, yet why has there seemingly been no Senate debate, discussion or public comment?

Losses for the GEMS project have been quoted at anything from $200 to $400 million, and as yet, no analysis has been in what part in the closure of over 30 private sector hotels over the last fifteen years they have played.

Adrian Loveridge

(Editor’s note: The headline “GEMS cover-up continues under DLP…” was created by Barbados Free Press. The body of the article is exactly as received from Mr. Loveridge)

Below article from the November 12, 2007 Nation News…

THE HOYOS FILE – A GEM OF A FINANCIAL REPORT

by Patrick Hoyos

November 12, 2007

WITH A SORT of morbid fascination, I have been revisiting the shipwreck that was Hotels & amp; Resorts Ltd, the above-ground financial counterpart of the Stavronikita at the end of 2001.

Yes, dear readers, I know this is almost December 2007 – so, you may wonder, what is the point? Well, there really isn’t any except that the 2001 accounts were only recently laid in Parliament along with the remainder of the company’s annual reports from 1997 to 2001, so I thought it would be “interesting” to recap the disastrous position GEMS had found itself in by then.

Writing in the notes to the financial statement for 2001, KPMG stated that “the company incurred a loss for the year ended December 31, 2001 of $22 million and had accumulated a deficit of $60 million at the year-end date. Also at that date, current liabilities exceeded current assets by $51 million. This raises substantial doubt that the company will be able to continue as a going concern without the continued financial support of its shareholders.”

$51 million? How did that happen? Current assets – which were made up of cash in hand as well as trade, VAT and other receivables, prepaid expenses and inventory – totalled a paltry $4.1 million, while current liabilities – the company’s bank overdraft, accounts payable and accrued expenses, a sum due to CRL Ltd, interest-bearing loans and interest payable – totalled $55.6 million. Subtract one from the other. Continue reading

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