| One of three investors, already having a stake in Cap Juluca, is expected to emerge as the new owner of Anguilla’s flagship tourism resort, under a new Memorandum of Understanding. The property is now in receivership. It sits on Government-owned land at Maunday’s Bay and, until recently, was operated by Adam Aron whose ownershipran into challenges with Charles Hickcox, one of the original owners who has now re-entered the scene. |
In the meantime, a third investor and partner of Aron, Mark Rowan, secured his investment in abid in an auction sale of the hotel’s fixtures and chattels on Monday, November 7. It is a matter which the Executive Council has been dealing with over the past several days in an effort to keep Cap Julucafunctioning, notwithstanding the auctioning of equipment, and to keep the 400-odd employees in their jobs.
The newly-appointed Liguidator for the property, William Tacon, who resides in the British Virgin Islands,met with the management and staff of Cap Juluca on Tuesday. Government officials, including Chief Minister and Minister of Finance, Economic Development and Tourism, Hubert Hughes, were also in attendance. He joined Mr. Tacon in addressing the staff and in assuring them of the Government’s firm commitment to keep the hotel in operation.
Mr. Tacon, who was involved in the sale of the Flag/Temenos project, said that the financial situation of Leeward Islands Resort, the company operating Cap Juluca, was very precarious in terms of working capital. He stated that his role was to try to preserve this business in the interest of the employees, stakeholders and the national economy. “I was appointed as liquidator to the company,” he said. “Liquidation is thought to be the end of the road, and there is nothing left at all. This is not the case in this particular occasion and this assignment.
“We are using the Anguillian company law in a very radical way to try to restructure the business going forward, to put it on a sound long-term financial process and footing. I should say…Mr. Aron technically remains the Director of the company. He does not have any executive powers at all going forward. For better or worse, I am the guy who makes the decisions, but I am answerable to the Court. I am making application today to have the liquidation process brought under the Court’s supervision. It makes me an officer of the Court and ensures perfect transparency of what we are doing, and the Court will bless anything going forward. It is a very important part of the process, and I want to emphasisethat the previous Directors do not have any role to play going forward. That, however, does not apply to the Management Team which remains very firmly in place with Gary [Thulander] General Manager still. We had a meeting with the Executive Team this morning and the normal lines of responsibility continue unabated; there is no change.”
Mr. Tacon said the company had a little money in the bank and needed more money to keep the business going through the Christmas period. He said the hotel had good bookings which would make it very busy, producing a positive cash flow. He pointed out, however, that there was currently a negative cash flow and that the main objective was to achieve enough working capital to keep the business going. He disclosed that there were three, or perhaps four, parties who could be interested in that objective. “The cash flow will not hold out for very long, and if we do not get additional liquidity into the company, it will have to stop,” he said. “That is the reality. I am not here to make false promises. It is difficult, but I do think that there is a very good chance that we will have sensible conversations with potentials funders, and that has to be done during the course of this week.” He estimated that it would take up to three million US dollars to operate the hotel between now and Christmas.
“Provided there is money to pay wages, you will remain employees of the company in the way that you are now,” he told the anxious staff. “I personally have not employed you, nor has my firm. You remain employees of the company. If we cannot raise the additional liquidity that I referred to, then again I want to be abundantly clear to you that the business will have to close. There is no magic solution. There is no pool of liquidity that I can tap into. I wish there were, that this uncertainty would go away, but we are doing everything to remove that uncertainty going forward and as quickly as possible.” Mr. Tacon continued: “I think everyone’s agendas here should be entirely aligned. There are a lot of parties in Anguilla, and outside, who want to preserve the value of this business; you as the employeeswant to have employment going forward; the creditors will look to be paid going forward; your guests will want to enjoy great experience going forward; and, of course, the Government of Anguilla wants Cap Juluca around as being a flagship resort as that makes a huge contribution to the economy. So everybody’s interests are absolutely aligned and there should be no disparity…The message is one of pulling together. The blog I know in Anguilla is very active; it could be totally disruptive. And it would be great if the messages going out would be that the liquidator and the Government are all working very closely together to try to rescue and sort out a difficult situation.” He added that he did not want to control the operations of the hotel, but he wants to keep the staff informed about the progress of the situation. He therefore advised them, in the meantime, to raise any issues with the Management Team for consultation with him. In addressing the workers, Chief Minister Hughes said in part: “I would like to reaffirm the commitment given by my Government to do all in its power to keep Cap Juluca open. We will spare no angle to ensure that impediments are removed to keep this hotel going and to keep your jobs intact.” Mr. Hughes stated the strength of organisations such as Cap Juluca depended on the unity of the affected people. “If you stick together and you trust your Government, we all can work together in making sure that we overcome this particular hurdle. We will work assiduously to shorten the agony. We will ensure that we take the requisite action, in a timely fashion, to facilitate what Mr. Tacon is trying to do – trying to conduct a process of re-construction. As you are well aware, and as he has categorically stated, the present situation is finance. You have a poor financial situation. As a matter of fact, it has gone beyond the Government as far as this process is concerned…You must understand that something had to give…Cap Juluca was riddled with rumours and the issue here is too serious. The social and financial needs of 400 people are at stake. Malliouhana is closed putting almost two hundred Anguillians out of work. This not only has a negative impact on the workers concerned, but adversely affects the Treasury of Anguilla and the economy as a whole.” The Chief Minister noted that Cap Juluca had won many prestigious awards and had been among the top ten hotels in the world. It was also reckoned to be a leading hotel in the region, but over the last two or three years had fallen to where it is today. “I want to tell you that in the presence of William [Tacon] yesterday (Monday), I made a commitment that the Government of Anguilla will enter into a Memorandum of Agreement with the most appropriate person who is owed money in this company. William explained that there are three people who have charges on this hotel in a particular order – one, two and three; and we have decided which one we think could easily qualify so that the dilemma can begin to be challenged and solved. “We have given a commitment in his presence, and in the presence of the Governor, that my Government will enter into a Memorandum of Understanding with one of those preferred people. We have also given a commitment that the shares will have to be transferred without delay. William expressed his acceptance and his joy at hearing that I was prepared to give those two commitments; and I did them in the presence of everybody concerned.” Mr. Hughes said that the Government would be negotiating the MOU in haste so that “some eligible person could be responsible for finding the money to keep the hotel open.” He also said the intention was “to ensure that the employees are paid; to stop the drift of money away from Cap Juluca; that money comes in, stays in and is used for the best purposes: that is to pay the staff first of all, [and then assist the economy]”. He added: “We want to think about the long-term and we want to restore Cap Juluca to its old glory; and to go around the world and advertise Cap Juluca once again as the leading hotel in the region and among the top hotels in the world.” A very lively question and answer period followed during which a number of concerns were expressed by staff members and explanations were given. |
