GOVT. SELLS HOTEL TO SANDALS.
Finance Minister Omar Davies said the move was a further indication of the Government's determination to divest assets to the private sector "as quickly as possible". The Sandals Ocho Rios resort ended up in Government's hands when it was forced to take control of its previous owners, the Eagle Financial Group in 1997, following liquidity problems which have devastated Jamaica's financial sector in recent years; Sandals Resorts head Gordon "Butch" Stewart said his organization, which controls 14 all-inclusive Sandals and Beaches hotels in the Caribbean, was preparing to buy more hotels to take advantage of what he predicted would be strong growth in Jamaica's billion U.S. dollar tourist industry. Stewart said Sandals would be spend US$7-US$8 million on refurbishing the hotel over a 24-month period; The Government, largely as a result of having to salvage financial sector entities over the past three years through its Financial Sector Adjustment Co. (FINSAC), is trying to sell controlling interest in 10 hotels islandwide in which it has a majority stake. These are Ciboney, Jamaica Grande, Plantation Inn, Negril Gardens, Trelawny Beach, Hedonism 11, Grand Lido, Terra Nova, Crown Plaza and Holiday Inn (Montego Bay); Complex arrangements, including legal entanglements, are hindering the Government's drive to rid itself of the hotels, and "significantly diminish the value of the assets," Davies said. The latest divestment followed Government's recent sale of its majority 43% stake in Carib Cement to Trinidad Cement Ltd. for US$29.4 million. Government expected to raise US$150 million from the sale of state assets in the fiscal year ending next March, said Davies; Divestment dividends would go towards the servicing of multi-billion dollar debts incurred by FINSAC in saving banks, near-banks and insurance companies. The Government has estimated that the cost of FINSAC bail-outs will exceed J$80 billion (more than US$2 billion).
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|Date:||May 1, 1999|
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